Compute the market price of the bonds on January

Assignment Help Accounting Basics
Reference no: EM133077866

Question - On January 1, 2020, Surigao Company issued bonds with face amount of P4,000,000 and stated interest rate of 12%. The interest is payable semiannually on June 30 and December 31. The bonds mature on every December 31 at the rate of P2,000,000 per year for 2 years. The prevailing market rate for the bonds is 8%.

Present value of 1 at 4%

One period - 0.9615

Two periods - 0.9246

Three periods - 0.8990

Four periods - 0.8548

Required -

1. Compute the market price of the bonds on January 1, 2020.

2. Prepare a table of amortization using the effective interest method.

3. Prepare journal entries for 2020 and 2021.

Reference no: EM133077866

Questions Cloud

What is Croissant fixed overhead spending variance : Croissant Company standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. What is Croissant fixed overhead variance
Us treasury bond with a yield to maturity : You are offered two bonds, a one-year U.S. Treasury bond with a yield to maturity of 9% and a one-year U.S. Treasury bill with a yield on a discount basis of 8.
Components of m1 relative to income : How have the components of M1 relative to income (GDP) changed over time and why? Use the nominal levels of the components of M1 = currency (CURRSL) + demand de
What is the amount of cost of goods sold for the month : BlueJay Company also sold 1205 units during the month. Using the FIFO method, what is the amount of cost of goods sold for the month
Compute the market price of the bonds on January : On January 1, 2020, Surigao Company issued bonds with face amount of P4,000,000. Compute the market price of the bonds on January 1, 2020
What is the depreciation expense on this asset : Crane used the asset for 1,300 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset
What should be the size of the sinking fund payments : Thermo-Tech Systems recently sold a $20 million bond issue with a 20-year maturity. What should be the size of the sinking fund payments
What is the market price per bond : Fubbler company offers a 7% coupon bond with semi-annual payments and a yield to maturity of 10., 68%. The bonds mature in 16 years. What is the market price pe
What is the firm cost of new equity : Porsche stock sells for $50 per share, its first-year dividend will be $3.00, its growth rate is a constant 5 percent, What is the firm cost of new equity

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.

  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!

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