Ava, Inc., issued 7% bonds, dated January 1, with a face amount of $117,200 on January 1, 2016 for an issue price of 106.5. The
bonds mature on December 31, 2025 (10 years). For bonds of similar risk and maturity the market yield is 9%. Interest is paid annually on December 31.
What is the interest payment on the bond?
10b) A company issued 5%, 20-year bonds with a face amount of $302,000. The market yield for bonds of similar risk and maturity is 5%. Interest is paid annually. What is the debit to cash for the bond proceeds?
Here are the PV and PVA factors
PV i=5%, 20 periods
PVA i=5%, 20 periods
PV i=7%, 20 periods
PVA i=7%, 20 periods
.37689
12.46221
.25842
10.59401
What is the interest payment on the bond?
10b) A company issued 5%, 20-year bonds with a face amount of $302,000. The market yield for bonds of similar risk and maturity is 5%. Interest is paid annually. What is the debit to cash for the bond proceeds?
Here are the PV and PVA factors
PV i=5%, 20 periods
PVA i=5%, 20 periods
PV i=7%, 20 periods
PVA i=7%, 20 periods
.37689
12.46221
.25842
10.59401
1 answer:
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