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cluponka [151]
3 years ago
10

Trew Company plans to issue bonds with a face value of $902,000 and a coupon rate of 6 percent. The bonds will mature in 10 year

s and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1). Determine the issuance price of the bonds assuming an annual market rate of interest of 7.5 percent.
Business
1 answer:
Agata [3.3K]3 years ago
5 0

Answer:

$807,992

Explanation:

issue $902,000 with a 6% semiannual coupon and 10 year maturity. coupon payment = $27,060

if the annual market interest rate = 7.5%, the bonds should be sold at a discount:

issue price = present value of face value + present value of interest payments

  • present value of face value = $902,000 / (1 + 3.75%)²⁰ = $431,961
  • present value of annuity = $27,060 x {1 - [1 / (1 + 3.75%)²⁰]} / 3.75% = $376,031

issue price = $431,961 + $376,031 = $807,992

the journal entry should be:

Dr Cash 807,992

Dr Discount on bonds payable 94,008

    Cr Bonds payable 902,000

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Seth invested $20,000 in Series EE savings bonds on April 1. By December 31, the published redemption value of the bonds had inc
11Alexandr11 [23.1K]

Answer:

700 for interest

Explanation:

6 0
3 years ago
Acheron Co.'s December 31, Year 1, balance sheet contained the following items in the long-term liabilities section: Unsecured 5
Butoxors [25]

Answer:

Term bond $725,000

Debenture bonds $775,000

Explanation:

Calculation to determine the total amounts of term bonds and debenture bonds

TERM BONDS

6.5% unsecured convertible bonds of $225,000

Add 4.875% guaranty secured bonds of $500,000

TOTAL term bond total $725,000

($225,000+$500,00

DEBENTURE BONDS

5.375% registered bonds of $550,000

Add 6.5% convertible bonds of $225,000,

TOTAL Debenture bonds $775,000

($550,000+$225,000)

Therefore the total amounts of term bonds will be $725,000 and debenture bonds will be $775,000

4 0
2 years ago
Read 2 more answers
A company purchased $3,200 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $900 worth of merchandise. On
Jlenok [28]

Explanation:

The correct journal entry is as follows

Accounts payable A/c Dr $2,300      

     To Cash A/c   $2,254            

     To Merchandise Inventory A/c $46

(Being due amount is paid and the remaining balance is credited to the cash account)

It is computed below:

For account payable

= $3,200 - $900

= $2,300

For Merchandise inventory

=  ($3,200 - $900) × 2%  

= $46

4 0
3 years ago
Coronado Industries has 4760000 shares of common stock outstanding on December 31, 2020. An additional 198000 shares are issued
Zinaida [17]

Answer:

BEPS Shares = 5,067,500

DEPS Shares =  5,309,500

Explanation:

Basic Earnings per Share (BEPS) = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Shares.

<u>Weighted Average Number of Common Shares</u>

Outstanding Common Shares                                                 4,760,000

Additional Shares: April( 9/12 × 198000)                                     148,500

Additional Shares: April( 4/12 × 477000)                                    159,000

Total Weighted Average Number of Common Shares         5,067,500

Diluted Earnings per Share (DEPS) =<em>Adjusted </em>Earnings Attributable to Holders of Common Stock /<em>Adjusted</em> Weighted Average Number of Common Shares.

<u><em>Adjusted</em></u><u> Weighted Average Number of Common Shares</u>

Basic Earnings per Share Common Shares                            5,067,500

Convertible Bonds ($6,050,000/$1,000 × 40)                          242,000

Total Weighted Average Number of Common Shares          5,309,500

5 0
3 years ago
Roger Greenberg was fired after being accused of misappropriation of company funds, a charge which he vehemently denied. When he
Leto [7]

Answer: Compelled self-disclosure defamation

Explanation:

From the question, Roger Greenberg was fired after he was accused of misappropriation of company funds, and he denied the charge. Due to this, he applied for another job, but he has been turned down on several occasions. Roger can file an action against his former employer for compelled self disclosure defamation.

Compelled self disclosure defamation claims commonly takes place in the event of a wrongful termination context. In this case, Roger can fill against them because their action of wrongfully accusing him is making his job search unfruitful.

7 0
3 years ago
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