A$18,000, 9.1% bond redeemable at par is purchased 6.5 years before maturity to yield 8.9% compounded semi-annually. If the bond interest is payable semi-annually, what is the purchase price of the bond? The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

A$18,000, 9.1% bond redeemable at par is purchased 6.5 years before maturity to yield 8.9% compounded semi-annually. If the bond interest is payable semi-annually, what is the purchase price of the bond? The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 500 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,000 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Required Assuming the market rate of interest is 10%, calculate the selling price for each bond issue.
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
A $27,000, 6% bond redeemable at par with interest payable annually is bought 12.5 years before maturity. Determine the premium or discount and the purchase price of the bond if the bond is purchased to yield (a) 7% compounded annually; (b) 5% compounded annually. (a) The is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
A $26,000 bond with interest at 5.5% payable semi-annually and redeemable at par is bought two years before maturity to yield 9.2% compounded semi-annually. Compute the premium or discount and the purchase price, and construct the appropriate bond schedule. The is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
A $26,000 bond with interest at 5.5% payable semi-annually and redeemable at par is bought two years before maturity to yield 5.8% compounded semi-annually. Compute the premium or discount and the purchase price, and construct the appropriate bond schedule. The is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) h
A $90,000 bond bearing interest at 3% payable annually is bought nine years before maturity to yield 3.75% compounded semi-annually. If the bond is redeemable at par, what is the purchase price? The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Determine the purchase price at the indicated time before maturity of the following bond redeemed at par shown in the table below. Par Value $9,000 Bond Rate Payable Semi-Annually 10.5% Time Before Maturity Yield Rate 9 years 11.5% Conversion Period semi-annually The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
$22,000, 5.4% bond redeemable at par is purchased 9.5 years before maturity to yield 5.1% compounded semi-annually. If the bond interest is payable semi-annually, what is the purchase price of the bond? The purchase price of the bond is § (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
A S25,000,7% bond redeemable at par with interest payable annually is bought 5.5 years before maturity. Determine the premium or discount and the purchase price of the bond if the bond is purchased to yield (a) 8% compounded annually : b)6% compounded annually The (Round the final answer to the nearest cent as neededRound all intermediate values to six decimal places as needed.)
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