Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Chapter 11, Problem 2R
The
- a.
- b.
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Interest rates or discount rates. Fill in the interest rates for the following table,
methods below:
a. Use the interest rate formula, r=
b. Use the TVM keys from a calculator.
c. Use the TVM function in a spreadsheet.
PV
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using one of the three
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COURSE LEARNING OBJECTIVE: Students will use electronic worksheets or other productivity tools to
solve problems and develop models.
EXCEL LEARNING OBJECTIVES:
- Use the built-in formulas to determine the present value (PV) of a bond
- Use the built-in formulas to determine the effective issuance rate of a bond with issue costs (RATE)
- Set up an automated bond amortization schedule.
- Name cells using the Name Box
- Use Scenario Manager to create a scenario describing the effects of a change in the market interest rate (an
independent variable) on the proceeds from issuing the bond (a dependent variable) and the corresponding
total interest expense (a dependent variable) over the term of the bond.
Correcting entries for bonds transactions
AAA Inc. recently hired a new accountant with extensive experience in tax accounting. Because of the
pressures of the new job, the accountant was unable to review the topic of accounting for bonds payable.
During the first year, he made the…
Please include the formula needed to know the coupon rate and any rules that there may be.
Please highlight the answer if you can, thank you.
Chapter 11 Solutions
Excel Applications for Accounting Principles
Ch. 11 - The University Club recently issued 1,500,000 of...Ch. 11 - The bond pricing formula utilizes the NPV (Net...Ch. 11 - Prob. 3RCh. 11 - Prob. 4RCh. 11 - Use the worksheet to compute the bond issue price...Ch. 11 - Use the worksheet to compute the bond issue price...Ch. 11 - Prob. 7RCh. 11 - a. Reset the Data Section to its initial values....
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- Find the price of the bond. Solve the question without using Excel and provide the necessary calculations.arrow_forwardHello Can you show how to calculate the price of the bond on Excelarrow_forwardDiscuss the risks and payoffs of the following positions, accompanied by payoff graphs. Buy a bond. Buy stock, buy a put, and sell a call. Sell a put (naked put).arrow_forward
- What is the relationship between bond price and yield. Explain with an example and graphical representation.arrow_forwardRequired: Note: Use cells A2 to B12 from the given information to complete this question. Using any necessary data above, calculate the Macaulay Duration of each bond. Then, use the Macaulay Duration to solve for the Modified Duration.arrow_forwardState the formulae you will need to compute the number of shares in a portfolio and the capital deposited in the bank at any time t, 0 ≤ t ≤ 1 in geometric Brownian motionarrow_forward
- Using the previous information, correctly match each curve on the graph to it's corresponding issuing company. (Hint: Each curve indicates the path that each bond's price, or value, is expected to follow.) Curve A Curve B Curve C Based on the preceding information, which of the following statements are true? Check all that apply. O Johnson Incorporated's bonds have the highest expected total return. O The bonds have the same expected total return. O The expected capital gains yield for Smith, LLC's bonds is negative. O The expected capital gains yield for Smith, LLC's bonds is greater than 12%. Irwin Corporation's bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to as aarrow_forwardExplain the bonds and stocks (You may use definitions, explanations, graphs, charts,…)arrow_forwardRequired:(i) Calculate the bond durations for Bond A and Bond B respectively using a table format.Show the formulas and workings in each column. (ii) Determine the investment decision based on the market expectation and your answer in part (i) above.arrow_forward
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