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Rashid [163]
3 years ago
8

Legacy issues $570,000 of 8.5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31

. They are issued at $508,050 when the market rate is 12%.
Business
1 answer:
Doss [256]3 years ago
5 0

Answer:

journal entry  based on straight line method are given below

Explanation:

given data

issues = $570,000

rate = 8.5 %

time = 4 year

issued = $508,050

market rate = 12%

to find out

prepare journal entry

solution

journal entry  based on straight line method

date                    general journal                              Debit             Credit  

June 30               bond interest expenses                $31969  

                            Discount on Bonds payable                                $7744

                             = (570000-508050 ) ÷ 8

                              Cash = 570000 × 8.5% ÷ 2                                $24225

December 31       Bond interest expense                  $31969  

                            Discount on Bonds payable                                $7744

                             = (570000-508050 ) ÷ 8

                              Cash = 570000 × 8.5% ÷ 2                                $24225

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What is the discount yield, bond equivalent yield, and effective annual return on a $3 million commercial paper issue that curre
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Answer:

(a) 6.206%

(b) 6.54%

(c) 6.58%

Explanation:

Given that,

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(a) Discount yield:

= \frac{(Face\ value - Current\ price)}{Face\ value}\times\frac{360}{Days\ in\ maturity}

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Future value = Present value × (1+r)^{n}

$100 = $97.50 × (1+r)^{\frac{145}{365}}

(\frac{100}{97.50})^{\frac{365}{145}} = 1+r

1.0658 = 1 + r

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