Sadik Inc.'s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year ma
turity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)?
1 answer:
Answer:
7.74%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,180
Assuming figure - Future value or Face value = $1,100
PMT = $105
NPER = 5 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the answer would be 7.74%
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Answer:
Income Tax Expense a/c Dr $ 20,57,000
Deferred Tax Liability a/c Dr $ 43,000
To Income Tax Payable a/c Cr $ 21,00,000
($6 Million x 35%)
Explanation:
The Above will result in timing Difference.
Timing Differences are those which can be reversed in subsequent periods.
Income Tax Expense a/c Dr $ 20,57,000
Deferred Tax Liability a/c Dr $ 43,000
To Income Tax Payable a/c Cr $ 21,00,000
($6 Million x 35%)
( Being Entry Passed for Tax Expense and Timing Difference Adjusted through Deferred Tax Liabilty)
