Compute the market price of the bonds

Assignment Help Accounting Basics
Reference no: EM132939390

Problem - At the beginning of current year, Synthesis Company purchased a ten-year bond with a face amount of P5,000,000. The stated interest rate is 8% per year payable semi-annually June 30 and December 31. The bonds were acquired to yield 10%.

Present value of 1 for 10 periods at 10% .386

Present value of 1 for 20 periods at 5% .377

Present value of an annuity of 1 for 10 periods at 10% 6.145

Present value of an annuity of 1 for 20 period at 5% 12.462

Required -

1. Compute the market price of the bonds.

2. Without computing first the answer, what is the best indicator to become a basis that the market price is at premium or discount when sold? Explain.

Reference no: EM132939390

Questions Cloud

Why is it important to check equipment : Why is it important to check equipment is in a serviceable condition, prior to use?
Calculate the balance of receivable from factor : Calculate the Balance of Receivable from Factor after recording receipt of the check from the bank as final settlement of the factoring, under without recourse
What is the internal rate of return : Question - What is the internal rate of return (IRR) of this project given the following cash flows
Developments in the international financial environment : Multinational Enterprise (MNE) listed on an internationally recognised Stock Exchange (including for example, London, Dublin, New York or Paris)
Compute the market price of the bonds : Synthesis Company purchased a ten-year bond with a face amount of P5,000,000. Compute the market price of the bonds
Involvement in a variety of hrm activities : You have been offered two positions in HRM. One is a generalist position in a smaller business, and one is a recruiting position in a large corporation. Which o
Explain the aims and objectives of employment regulation : Assessment criterion: 1.1 Explain the aims and objectives of employment regulation.
Advantages of multiple hurdle model : Advantages of multiple hurdle model? Disadvantage of multiple hurdle model? What is compensatory model?
What the projected benefit obligation at December : On January 1, 20X4, the projected benefit obligation for Reason Corporation was $440,000. What the projected benefit obligation at December

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the withholding tax on the dividend paid to forco

ForCo, a foreign corporation not engaged in a U.S. trade or business, What is the withholding tax on the dividend paid to ForCo

  Calculate the market price today

Calculate the market price today of a P1,000 bond which has 10 years until maturity and pays quarterly interest at an annual coupon rate of 12 percent

  What is a warranty liability

What is a warranty liability? What is the purpose of accruing a warranty liability before any actual claims are made?

  What is xyz federal income tax liability

Company ABC, is an exempt medical organization. XYZ, Inc., a sporting goods retailer, is a wholly owned subsidiary of Company ABC. Company ABC inherited the XYZ stock last year from a major benefactor of the medical organization. XYZ's taxable inc..

  Breakeven point in units for a firm is 75000 units its

breakeven point in units for a firm is 75000 units. its selling price is 14 and variable cost is 12. a what is the

  Evaluate financial opportunity presented by the companies

Evaluate the financial opportunity presented by the companies. If the team was going to lend money to one of the companies reviewed, which one would it be? Defend the team's decision

  Make a statement of cash flows for capello ltd

Make a statement of cash flows for Capello Ltd for the year ended 30 June 2019 in accordance with AASB 107. Prior-period comparative figures

  What is the amount of income tax expense for sheridan co

Sheridan Company has a tax rate of 20% and income taxes payable of $190000 at the end of 2021. What is the amount of income tax expense for 2021?

  What is the amount of annual investment

This account will earn 13% per year and will have $1,750,000 in the account at retirement. What is the amount of annual investment

  Determine the adjusted balance in the cash account

Medina Company received its February bank statement on March 6. Determine the adjusted balance in the cash account after completing a bank reconciliation

  Prepare an income statement and balance sheet

McGuire Corporation began operations in 2011. Prepare an income statement for 2011 and a balance sheet as of December 31, 2011

  Based in italy datura ltd is an international

based in italy datura ltd. is an international importer-exporter of pottery with distribution centers in the united

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!

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