User Account

All Pages

Calculate the issue price of the bonds

Assignment Help Accounting Basics
Reference no: EM132758223

Question: On January 1, 2021, Oriole Ltd. issued bonds with a maturity value of $6,900,000 when the market rate of interest was 4%. The bonds have a coupon (contractual) interest rate of 5% and mature on January 1, 2031. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. The company's year-end is December 31.

1. Calculate the issue price of the bonds.

2. Prepararation of bond amortization schedule from the date of issue up to and including January 1, 2023.

3. Preparation of the required journal entries related to the bonds that Oriole Ltd. will record during 2021, including any adjusting journal entries on December 31, 2021.

4. What amounts would be reported as current and non-current in the liabilities section of Oriole Ltd.'s December 31, 2021, balance sheet?

5. Record the payment of interest on January 1, 2022.

6. The bonds were redeemed on January 1, 2023 (after the interest had been paid and recorded) at 102. Prepare the journal entry for the redemption of the bonds.

7. Assume instead that the bonds were not redeemed on January 1, 2023. Record the entry for the repayment of the bonds on January 1, 2031.

8. What will be the total interest payment over the 10-year life of the bonds? What will be the total interest expense over the 10-year life of the bonds?

Reference no: EM132758223

Questions Cloud

Find what is expected price of creamy custard stock : Investors of Creamy Custard common stock earns 15% of return. It just paid a dividend of $6.00. What is expected price of Creamy Custard's stock?
Find the amount of direct material B purchased : Cape Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, Find the amount of direct material B purchased
Ensuring That Meetings Lead to Action : Think back to a recent meeting you attended that was not effective. Review all actions and responsibilities at the end of the meeting.
Discuss the features that differentiate : Discuss the features that differentiate organized exchanges from the over-the-counter market
Calculate the issue price of the bonds : On January 1, 2021, Oriole Ltd. issued bonds with a maturity value of $6,900,000 when the market rate of interest was 4%. The bonds have a coupon (contractual).
How does the medicaid population enrollment impact : How does the Medicaid population enrollment impact your state's economic condition and reimbursement for the state's healthcare providers?
What type of inventory does paint : What type of inventory does paint that has been colored but not yet put into cans represent for a paint company?
Prepare the journal entries on September : Prepare the journal entries on September 30, 2022, to record payment of the notes payable at maturity. Each firm has a December 31 year-end
Credit risk management : Discuss why credit risk management within the financial sector is so significant. What measures can banks employ to mitigate credit risks?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd