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Question - On September 1, Year 7, Bob the Builder issues a 10-year bonds with face value of $100,000 at 103. However, the net proceeds from the issuance of bonds is only $102,000 because the company had to pay $1,000 issue costs. Annual rate of 5.5% coupon is paid at March 1 and September 1. The company records its bonds at amortized cost and uses effective interest rate method for the amortization.
Required -
(1) Determine effective interest rate for the bonds for six months.
(2) Prepare the amortization schedule up to September 1, Year 8.
(3) Prepare the journal entry for December 31, Year 7 (fiscal year-end). If the journal entry is not required, please say so (instead of leaving it blank).
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: - Explain the goals and uses of special journals.
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.
Term Structure of Interest Rates
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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, Compound interest, discount rate, force of interest, AV, PV
CAPM and Venture Capital
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