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musickatia [10]
2 years ago
15

Stein Co. issued 15-year bonds two years ago at a coupon rate of 5.4 percent. The bonds make semiannual payments. If these bonds

currently sell for 94 percent of par value, what is the annual YTM
Business
1 answer:
kherson [118]2 years ago
7 0

The annual YTM will be 3.07% if the bonds make semiannual payments and sell for 94 percent of par value.

<u>Given data</u>

Coupon rate (CR) = 5.4%

Current price (B0) = 94%

Assuming maturity value (MV) = 100%

Years to maturity (n) = 15.

<h3>What is the Annual YTM?</h3>

YTM = CR + ((MV − B0)/n) / ((MV + B0)/2)

YTM = 5.4% + (100% - 94%)/15) / (100% + 94%)/2)

YTM = 0.054 + (-0.03866666666) / 0.97

YTM = 0.01533333334 / 0.97

YTM = 0.015333 * 2

YTM = 0.030666

YTM = 3.07%

In conclusion, the annual YTM will be 3.07% if the bonds make semiannual payments and sell for 94 percent of par value.

Read more about  Annual YTM

<em>brainly.com/question/15711043</em>

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Answer:

Given that,

Company's bank reconciliation at June 30 included interest earned = $150

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Therefore, the journal entry is as follows:

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Alona [7]

Answer:

amortization expense is $36000

Explanation:

given data

purchased = $180000

time = 5 year

to find out

amount recorded as amortization expense

solution

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so here

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amortization expense = 180000 / 5

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On September 30, 2021, Bricker Enterprises purchased a machine for $200,000. The estimated service life is 10 years with a $20,0
vagabundo [1.1K]

Answer:

$38,000

Explanation:

Double-declining-balance method used its ratio by computing depreciation expense. By multiplying it against original cost. To get ratio we simply divide 100% over the life of an asset times 2.

100% / 10 years x 2 = 20%

First, we will compute the 2021 depreciation for us to know our base amount on year 2022.

$200,000 x 20% = $40,000 x3/12 = $10,000

we prorate the annual depreciation expense because part of it is applicable to 2021 and 2022.

For year 2022, we have two ways to compute.

First:

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Or second, an alternative way to compute,

2021

$200,000 x 20% = $40,000 x 3/12=$10,000

2022

$200,000 - $10,000 = $190,000 (Net book value)

$190,000 x 20% = $38,000

*Residual value is ignored in computing depreciation expense under double-declining-balance method.

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