On October 1, 2020, Eastern Timber Inc. has available for issue $700,000 bonds due in four years. Interest at the rate of 5.00% is to be paid quarterly. Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Issue Price a. 6% b. 5% c. 4%

On October 1, 2020, Eastern Timber Inc. has available for issue $700,000 bonds due in four years. Interest at the rate of 5.00% is to be paid quarterly. Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Issue Price a. 6% b. 5% c. 4%

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 65BE

See similar textbooks

Similar questions

Problem 14-5A Calculating the issue price using business calculator PV function LO4 Part 1 On April 1, 2020, ET Inc. has available for issue $391,000 bonds due in four years. Interest at the rate of 5.5% is to be paid quarterly. Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) a. b. C. Market Interest Issue Price of the Bonds Rate 6.5% 5.5% 4.5%
Question Content Area On June 8, Williams Company issued an $79,482, 12%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? When required, round your answer to the nearest dollar. a. $79,482 b. $82,661 c. $9,538 d. $89,020
Chegg Home Expert Q&A My solutions Guide Me Notifications 8 Che Student question Time Left: 00:09:01 St Problem 31-30 Money-market yields In January 2020, three-month (91-day) Treasury bills were selling at a discount of 1.58%. What was the annual yield? Assume 365 days in a year. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Answer is complete but not entirely correct. Annual yield 6.44 % Show Transcribed Text
mid term q1 (1).jpg 8°C Partly sunny 2021 QS 10-2 Current portion of long-term debt LO1 On January 1, 2020, La Petite Macaron, a local French bakery, borrowed $84,000 from the bank. Interest is calculated at the rate of 4% and the term of the note is four years. Four equal annual payments will be made in the amount of $23,141 each December 31. The payment schedule is shown below: 2022 Year Annual Payment Principal Portion of Payment Interest Portion of Payment Principal Balance at Year-End 2020 $19,781 $3,360 $64,219 20,572 2,569 43,647 21,395 22,252 22,252 2023 $23,141 23,141 23,141 23,141 e Show how La Petite Macaron will show the note on its year-end balance sheet: 1. December 31, 2020 2. December 31, 2021 H Q Search : 444 hp 1,746 889 6 -0- Q 100% ENG IN 23:48 05-11-2023 0 pa dn
Cornerstone Exercise (Appendix 9A) Bond Issue Price On January 1, 2021, Callahan Auto issued $900,000 of 9%, 10-year bonds. Interest is payable semiannually on June 30 and December 31. Required: What is the issue price if the bonds are sold to yield 8%? (Note: Round to the nearest dollar.)
Current liabilities Bon Nebo Co. sold 25,000 annual subscriptions of Bjorn for 85 during December 20Y5. These new subscribers will receive monthly issues, beginning in January 20Y6. In addition, the business had taxable income of 840,000 during the first calendar quarter of 20Y6. The federal tax rate is 40%. A quarterly tax payment will be made on April 12, 20Y6. Prepare the current liabilities section of the balance sheet for Bon Nebo Co. on March 31, 20Y6.
Question 9 On 1 Dec. 2020, Segma Trading Co. borrowed $300,000 for 90 days at 5% by signing a note payable on the same amount Required: Select the right journal entry to record the payment of the note at its maturity date. O Dr. Note Payable $300,000 Dr. Interest Payable $2,500 Dr. Interest Expence $1,250 O Dr. Cash Cr. Cash $303,750 Cr. Note Payable $300,000 Cr. Interest Expence $2,500 Cr. Interest Payable $1,250 O Dr. Note Payable $300,000 Dr. Interest Expence $2,500 Dr. Interest Payable $1,250 Cr. Cash $303,750 O Dr. Note Payable $300,000 Dr. Interest Expence $3,750 Cr. Cash $303,750 $303,750
Problem 14-1A Calculating bond prices and recording issuance with journal entries LO3, 5, 6 Queen Energy Inc. Issued bonds on January 1, 2023, that pay interest semiannually on June 30 and December 31. The par value of the bonds is $340,000, the annual contract rate is 12%, and the bonds mature in 10 years. (Use IABLE 14A1 and IABLE 14A.2) (Use appropriate factor(s) from the tables provided.) Required: a. For each of these three situations, determine the issue price of the bonds. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) (1) (2) (3) Market rate Issue Price of the interest Bonds 10% 12% 14% b. For each of these three situations, prepare the journal entry that would record the issuance, assuming the market interest rate at the date of issuance was (1) 10%, (2) 12%, (3) 14%. ( Use PV tables in determining the issue price of the bonds. Do not round intermediate calculations, Round the final answers to the nearest whole dollar.)
Exercise 10-2 Straight-Line: Amortization of bond discount LO P2 Tano issues bonds with a par value of $99,000 on January 1, 2017. The bonds' annual contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $93,809. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an amortization table using the straight-line method to amortize the discount for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the amount of the discount on these bonds at issuance? Discount
Question 31 Nelsie Corporation has an outstanding 60- day 6% note receivable armounting to P 15.000 dated December 1 of the current yoar. The company is using the calendar yoar in preparing its financial statomonts. What account should be creditod and what is the amount? Interest Income, P 75 Interest Income, P 900 Oc Accrued Interest Income, P 150 Unearmed Interest Income, P150
Problem 9-48 Part 2 2. If the market interest rate is 8 %, the bonds will issue at $1,742,930. Record the bond issue on January 1, 2021, and the first two semiannual interest payments.on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" In the first account fleld. Round your answers to the nearest dollar amount.) No 1 Required Information Problem 9-4B Record bond issue and related interest (LO9-5) [The following information applies to the questions displayed below] Viking Voyager specializes in the design and production of replica Viking boats. On January 1, 2021, the company issues $1,870,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. 2 3 Date January 01, 2021 June 30, 2021 Answer is not complete. General Journal Cash Discount on Bonds Payable Bonds Payable December 31, 202 Interest Expense Interest Expense Discount on Bonds Payable Cash…
Exercise 10-2 Straight-Line: Amortization of bond discount LO P2 Tano issues bonds with a par value of $99,000 on January 1, 2017. The bonds' annual contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $93,809. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare an amortization table using the straight-line method to amortize the discount for these bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare an amortization table using the straight-line method to amortize the discount for these bonds. (Round your intermediate calculations to the nearest dollar amount.) Carrying Value Semiannual Period- Unamortized End Discount 01/01/2017 06/30/2017 12/31/2017 06/30/2018…