On May 1, 2024, Joe purchased $290,000 in zero-coupon bonds that mature on May 1, 2044. The bonds pay no interest during the period of time they are outstanding. The interest rate for such borrowings is at 9%. Interest compounds annually. Note: Use tables, Excel, or a financial calculator. Enter your answer rounded to the nearest whole dollar. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: Calculate the price Joe paid for the bonds.
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- North Co. Issued bonds on July 1, 2018 worth $100,000 with a coupon rate of 10% and an effective interest rate of 8%. Interest is paid annually, every July 1, and bonds mature after 5 years. Required: PV of Bonds: Calculation PV of Principal and PV of Interest and give your explanation about your calculation! Make issuance journal and please explain about the journal! Amortization: Calculation Bond Amortization Table and explain the result! Make Interest adjustment, amortization journal, and explain about the journal! Make Interest payment journal, amortization, and explain about the journal! Journalize Redemption at maturity and explain about the journal!Use the following to answer questions 4-7 (Round answers to the nearest dollar) The company issues 7.4%, 5-year bonds with a total face amount of $100,000. The market interest rate for bonds of similar risk and maturity is 7.6%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET (input your answers after you've completed the entire problem). 5. 7. will S expense? S payment? (rounded to nearest dollar). What is the issue price of the bond? (rounded to nearest dollar). When the company records the first interest payment, how much record company for interest. the (rounded to nearest dollar). What is the bond liability (carrying amount) after the first interest (rounded to nearest dollar). When the company records the second interest payment, how much will the company record for interest expense?Osbourne Oasis, Inc. is running short on cash. Osbourne decides to sell bonds to help with the cash problem. On January 1, 2022 Osbourne sells $1,000,000, 3-year bonds with a coupon rate of 3% payable annually. The market rate of interest was 4%. What would the journal entry be to record the first payment of interest on 12/31/22? STON Dr. Interest Expense $38,890, Cr. Bonds Payable $8,890, Cr. Cash $30,000 Dr. Interest Expense $30000, Dr. Bonds Payable $8,890, Cr. Cash $38,890 Dr. Interest Expense $30,000, Cr. Cash $30,000
- Your answer is partially correct. Swifty Ltd. issued a $1,184,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Swifty followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond.2. An investor buys a bond for $5,000. The bond pays $125 interest every six months. After 18 months, the investor sells the bond for $4,839. Describe the types of income and/or loss the investor had. Review Only Click the icon to see the Worked Solution. The current income is $ (Round to the nearest dollar.) The investor would experience (1) in the amount of $ (Choose from the drop-down menu and enter a loss as a negative number rounded to the nearest dollar.) The total return on this investment is $ (Round to the nearest dollar.) (1) O a capital gain a capital loss neitherOn January 1, 2024, Morton Sales Company issued zero-coupon bonds with a face value of $6.9 million for cash. The bonds mature in 8 years and were issued at a price of $4,015,869. Required: What total Interest expense will Morton Sales Company report over the 8-year life of these bonds? Note: Use tables, Excel, or a financial calculator. Enter your answer in whole dollars. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Interest expense
- Suppose you purchase a $1,000 TIPS on January 1, 2024. The bond carries a fixed coupon of 3 percent. Over the first two years, semiannual inflation is 2 percent, 4 percent, 1 percent, and 2 percent, respectively. For each six-month period, calculate the accrued principal and coupon payment. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Answer is complete but not entirely correct. Accrued Principal First 6 months Second 6 months Third 6 months Fourth 6 months $ S $ $ Coupon Payment 1,040.00 $ 1,050.40 $ 1,060.90 € $ 1,092.73 $ 15.60 15.76 15.91 16.39Suppose you purchase a $1,000 TIPS on January 1, 2024. The bond carries a fixed coupon of 1 percent. Over the first two years, semiannual inflation is 4 percent, 1 percent, 2 percent, and 1 percent, respectively. For each six-month period, calculate the accrued principal and coupon payment. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Accrued Principal Coupon Payment First 6 months $ 30.00 $ 10.00 x Second 6 months $ 30.90 $ 10.30 X Third 6 months $ 10.61 $ 10.61 x Fourth 6 months S 42.86 $ 10.72 xLast year, Kevin Thomas purchased a $1000 Campbell Manufacturing corporate bond with an annual interest rate of 7.25%. The bond's current market price is $770. Calculate the following. If necessary, round all answers to two decimal places. If necessary, refer to the list of financial formulas. 1. Annual interest: 2. Current yield: $0 0% X S
- Fold in the Cheese, Inc. is issuing $850000 of 8% 10-year bonds. These bonds will pay semi-annual interest payments. The market interest rate is currently 6%. Required: Compute what your bonds are worth. Round all calculations to 2 decimals. Record the sale of the bond with a journal entry. Record the journal entry for your first interest payment.Help Save & Exit Saved On January 1, 2021, Mirada, Inc. issued five-vear bonds with a face value of $100.000 and an annual stated interest rate of 8%. Interest payments are made semi-annually on June 30th and December 31st. The bonds were issued for $108,530, when the market rate of interest was 6%. What is the carrying value of the bonds on June 30, 2022 (i.e., after the third interest payment)? Multiple Choice S107,786 S112,718 $100,000 S106,230 < Prev 6 of 40 ISuppose you purchase a $1,000 TIPS on January 1, 2024. The bond carries a fixed coupon of 1 percent. Over the first two years, semiannual inflation is 4 percent, 1 percent, 2 percent, and 3 percent, respectively. For each six-month period, calculate the accrued principal and coupon payment. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. First 6 months Second 6 months Third 6 months Fourth 6 months Accrued Coupon Principal Payment