On January 1, 2018, Brandon Electronics issued $85 million of 11.5% bonds, dated January 1. The market yieldfor bonds of maturity issued by similar firms in terms of riskiness is 12.25%. How can Brandon sell debt payingonly 11.5% in a 12.25% market?
Q: Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $1,400 million on…
A: The journal entries are prepared to keep the record of day to day transactions of the business. The…
Q: On February 9, 2015, Hunter-Gratzner, Inc. issued a 10 year bond (with a typical $1000 face value)…
A: Bonds are the assets which are available in bonds market that is the market for debt based…
Q: On January 1, 2020, ABC Corporation invested in P2,000,000 bonds of DEF Company that will mature on…
A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…
Q: On January 1, 2018, Darnell Window and Pane issued $18 million of 10-year, zero-coupon bonds…
A: 1.
Q: On January 1, 2015, Methodical Manufacturing issued 100 bonds, each with a face value of $1,000,a…
A: Amortization Schedule: An amortization schedule is a table that shows the details of each loan…
Q: On January 1, 2012, Fei Corp. issued a 3-ye 5% coupon, $100,000 face value bond. The bond was priced…
A: Interest Expense = Carrying Amount of Bond x Effective Interest Rate
Q: Myriad Solutions, Inc. issued 14% bonds, dated January 1, with a face amount of $410 million on…
A: Bonds payable: It is a long term liability to the organization issuing it. It is issued to raise…
Q: 1. On January 1, 2013, Y. Corp. issued 10% - 5 year bonds with a face of P100,000 at P97,500.…
A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…
Q: The balance sheet at December 31, 2021, for Nevada Harvester Corporation Includes the liabilitiles…
A: SOLUTION- CLASSIFIED BALANCE SHEET- IT IS A FINANCIAL STATEMENT PORTRAYING FINANCIAL POSITION OF…
Q: On 2 January 2016, ME Ltd (ME) issued $10,000,000 5-year bonds for $10,811,090. The stated coupon…
A: The question is based on the concept of Financial Accounting. As per the Bartleby guidelines we are…
Q: In 2022, Dvorak Company issued $200,000 of bonds for $189,616. If the stated rate of interest was 6%…
A: Note: Under effective interest method, interest expense is calculated by multiplying the yield or…
Q: On 2 January 2016, ME Ltd (ME) issued $10,000,000 5-year bonds for $10,811,090. The stated coupon…
A: Years credit cash account Interest expense Jun30, 2017 $500,000 $426,931.00 Dec31, 2017 $500,000…
Q: On January 1, 2018, Morton Sales Co. issued zero-coupon bonds with a face value of $5.7 million for…
A: Given that: Face value of zero coupon bonds = $5.7 million Period of bonds = 6 years Issue price =…
Q: How this liability is shown in the Balance sheet at the end of first year (31st March, 2016)?
A: A zero coupon bond is an instrument that is issued at discount and then paid out at full value. The…
Q: Northcrest 1st National Bank issued $1000 par, 20-year bonds, with a coupon rate of 6.5% on April…
A: YTM YEILD to MATURITY is that rate of discount at price of bond is equal to present value of coupon…
Q: On January 1, 2016, Darnell Window and Pane issued $18 million of 10-year, zero-coupon bonds for…
A: 1.
Q: On January 1, 2015, Mac Inc. issued 3,000,000 bonds with a coupon rate of 8% maturing in 4 years.…
A: Issue Price of Bond (Present Value) = PV of Coupon Payments + PV of Redemption Value PV of Coupon…
Q: On January 1, 2016, Brandon Electronics issued $85 million of 11.5% bonds, dated January 1. The…
A:
Q: On July 1, 2020, ZZZ Inc. issues $100,000 face value, 7% semiannual coupon bonds maturing in 10…
A: Cash flows from operating activities: It is a section of Statement of cash flow that explains the…
Q: On January 1, 2016, Broker Corporation issued $3,000,000 par value 12%, 10-year bonds which pay…
A: Issue Price of Bond=Present Value of Maturity amount+Maturity value of Interest payment Present…
Q: present value of bond?
A: Bond refers to the investment securities in which an investor lends money to the government for a…
Q: On June 30, 2021, Marc Industries had outstanding $800 million of 8% convertible bonds that mature…
A: From the question we get the following data: Face value of the bond converted = $800 million * ½ =…
Q: On January 1, 2021, Ivanhoe Ltd. issued bonds with a maturity value of $7,900,000 when the market…
A: Bonds payable: It is a long term liability to the organization issuing it. It is issued to raise…
Q: On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021 with a face amount of…
A: Issue Price of the bonds = Present value of principal + Present value of interest payments = face…
Q: Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July…
A:
Q: Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July…
A:
Q: How this liability is shown in the Balance sheet at the end of first year (31st March, 2016)?
A: Zero-coupon bond is the bond on which there is not written on any discount rate means there will be…
Q: The Green Cable Corporation issued a newseries of bonds on January 5, 2015. The bonds weresold at…
A: YTM stands for yield to maturity. It is the required rate of return which investors expect from the…
Q: uzzy Monkey Technologies, Inc., purchased as a long-term investment $80 million of 8% bonds, dated…
A:
Q: On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021 with a face amount of…
A: Given information Face value of bond = P 8,000,000 Life of bond = 6 years Number of periods = 6 x…
Q: AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2016. The bonds…
A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money…
Q: On January 1, 2014, Buknoy Company purchased serial bonds with face value of P3,000,000 and stated…
A: To find the presert value of bond , we need to discount the future cash flow to find out the present…
Q: The balance sheet at December 31, 2016, for Nevada Harvester Corporation includes the liabilities…
A: Reasoning behind classifications: Bonds are classified as current liability. The debt is currently…
Q: AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2018. The bonds…
A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing…
Q: On January 1, 2021, Darnell Window and Pane issued $18 million of 10 year, zero-coupon bonds for…
A:
Q: Myriad Solutions, Inc. issued 10% bonds, dated January 1, with a face amount of $320 million on…
A: 1.Net amount of liability reported in balance sheet of December 31,2021:
Q: On 2 January 2016, ME Ltd (ME) issued $10,000,000 5-year bonds for $10,811,090. The stated coupon…
A: Journal entry: It is used to record the business transactions (Economic and non economic) of an…
Q: Uber Technologies Inc. issued $2 billion of bonds in October 2018. The total bond issuance included…
A: Bond:— Bond is a financial Instruments which is issued by the Company & Goverment to Generate…
Q: On February 9, 2015, Hunter-Gratzner, Inc. issued a 10 year bond (with a typical $1000 face value)…
A: The return provides by bonds are classified into several types which includes nominal yield,…
Q: Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July…
A: Working notes:
Q: 9. On the first day of 2021, Williams Company issued zero coupon bonds. These bonds have a face…
A: Face value of Bonds= $5.3million Issue price of bonds=$19,20,985 Annual interest rate= Issue…
Q: On September 27, 2015, Koala, Inc. issued a 10 year bond (with a typical $1,000 face value) that had…
A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
Q: On January 1, 2020, ABC Corporation invested in P2,000,000 bonds of DEF Company that will mature on…
A: We have invested today 2000000 on which we have received interest at 10% for the next three years.…
On January 1, 2018, Brandon Electronics issued $85 million of 11.5% bonds, dated January 1. The market yield
for bonds of maturity issued by similar firms in terms of riskiness is 12.25%. How can Brandon sell debt paying
only 11.5% in a 12.25% market?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- On January 1, 2021, Brandon Electronics issued $85 million of 11.5% bonds, dated January 1. The market yield for bonds of maturity issued by similar firms in terms of riskiness is 12.25%. How can Brandon sell debt paying only 11.5% in a 12.25% market?The balance sheet at December 31, 2016, for Nevada Harvester Corporation includes the liabilities listed below: a. 11% bonds with a face amount of $40 million were issued for $40 million on October 31, 2007. The bonds mature on October 31, 2027. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2017, at a redemption price of $40 million. Market conditions are such that the call is not expected to be exercised. b. Management intended to refinance $6 million of its 10% notes that mature in May 2017. In early March, prior to the actual issuance of the 2016 financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $5 million any time during 2017. Any borrowings will mature two years from the date of borrowing. c. Noncallable 12% bonds with a face amount of $20 million were issued for $20 million on September 30, 1994. The bonds mature on September 30, 2017. Sufficient cash is expected to be available to retire…The balance sheet at December 31, 2024, for Nevada Harvester Corporation includes the liabilities listed below: 10% bonds with a face amount of $42 million were issued for $42 million on October 31, 2015. The bonds mature on October 31, 2035. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2025, at a redemption price of $42 million. Market conditions are such that the call is not expected to be exercised. Management intended to refinance $8.7 million of its 9% notes that mature in May 2025. In early March, prior to the actual issuance of the 2024 financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $6.5 million any time during 2025. Any borrowings will mature two years from the date of borrowing. Noncallable 10% bonds with a face amount of $18.2 million were issued for $18.2 million on September 30, 2005. The bonds mature on September 30, 2025. Sufficient cash is expected to be available to retire…
- Uber Technologies Inc. issued $2 billion of bonds in October 2018. The total bond issuance included $500 million of five-year bonds with a 7.5% coupon and $1.5 billion of eight-year bonds with an 8% coupon. How would Uber’s financial statements be impacted by its $2 billion bond issuance? Would you have bought the bonds if you could? Why or why not?AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2016. The bonds sold for $150 million. For bonds of similar risk and maturity the market yield was 9%. Upon issuance, AI elected the option to report these bonds at their fair value. On June 30, 2016, the fair value of the bonds was $145 million as determined by their market value on the NASDAQ. Will AI report a gain or will it report a loss when adjusting the bonds to fair value? If the change in fair value is attributable to a change in the interest rate, did the rate increase or decrease? Will the gain or loss be reported in net income or as OCI?Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July 1, 2018, at a price of $380 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.What would be the amount(s) related to the bonds that Agee would report in its statement of cash flows for the year ended December 31, 2018, if it uses the indirect method?
- The balance sheet at December 31, 2024, for Nevada Harvester Corporation includes the liabilities listed below: a. 7% bonds with a face amount of $46 million were issued for $46 million on October 31, 2015. The bonds mature on October 31, 2035. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2025, at a redemption price of $46 million. Market conditions are such that the call is not expected to be exercised. b. Management intended to refinance $6.6 million of its 14% notes that mature in May 2025. In early March, prior to the actual issuance of the 2024 financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $4.6 million any time during 2025. Any borrowings will mature two years from the date of borrowing. c. Noncallable 6% bonds with a face amount of $14.5 million were issued for $14.5 million on September 30, 2005. The bonds mature on September 30, 2025. Sufficient cash is expected to be available to…Home Depot has debt outstanding with a face value of $30 billion. The coupon rate on these bonds is 6.2%. The current yield-to-maturity (YTM) on these bonds is 7.8%. Home Depot's tax rate is 26%. What is the effective cost of debt of Home Depot? OA. 9.83% OB. 6.20% OC. 4.59% OD. 5.77% OE. 7.80%Insouciance, Inc. (President, John Carefree) issued $200,000, 8% coupon bond on January 1, 2010, due on December 31, 2014. The prevailing market interest rate on January 1, 2010 was 10%, and the bond pays interest on December 31 of each. Consider the following (incomplete) table for the bond's carrying value (CV) Dec 31, 2012 ? Dec 31, 2013 CV Required: a. Calculate the price of the bond b. Calculate the missing CV c. How much interest expense did Insouciance record in 2013? d. Now assume semi-annual compounding so that the bond pays interest on June 30 and December 31 of each year. Repeat (a), (b), and (c).
- Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $320 million on January 1, 2016 for $283,294,720. The bonds mature on December 31, 2025 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. What would be the net amount of the liability Myriad would report in its balance sheet at December 31, 2016? 2. What would be the amount related to the bonds that Myriad would report in its income statement for the year ended December 31, 2016? 3. What would be the amount(s) related to the bonds that Myriad would report in its statement of cash flows for the year ended December 31, 2016?Most Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $640 million on January 1, 2016. The bonds mature in 2026 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest expense is recorded at the effective interest rate. Interest is paid semiannually on June 30 and December 31. Most recorded the sale as follows: January 1, 2016 Cash (price) ............................................................................................. 566,589,440 Discount on bonds (difference) ............................................................... 73,410,560 Bonds payable (face amount) .............................................................. 640,000,000 Required: What would be the amount(s) related to the bonds that Most would report in its statement of cash flows for the year ended December 31, 2016?Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?