User Account

All Pages

Determine the issue price of the debenture

Assignment Help Financial Accounting
Reference no: EM133008579

Question - On 1 July 2018 JTX Ltd issues $2 million in 10-year debentures that pay interest each six months at a coupon rate of 10 per cent. At the time of issuing the securities, the market requires a rate of return of 12 per cent. Interest expense is determined using the effective-interest method.

Formula for PV of $1 in n periods =1/(1+k)n

Formula for present value of annuity of $1 per period for n periods = where, k is the discount rate expressed in decimal

REQUIRED -

(i) Determine the issue price of the debenture.

(ii) Provide the journal entries at 1 July 2018 and 30 June 2019.

Reference no: EM133008579

Questions Cloud

Discuss the overall impact on audit risk : You are currently involved in planning for the audit of Spot Light Ltd (SLL), Discuss the overall impact on audit risk
Prepare the income statement and find the eps : Following information is available in respect of Som Dut Bearings Ltd.: Profit Volume Ratio (PV Ratio) 40%. Prepare the income statement and find the EPS
What should be the annual payment : John takes a loan of $. 700000 at 10% interest. He has to repay the loan which begins 7 years from now. What should be the annual payment
What is the dollar gain made by the investment bank : What is the dollar (and percent) gain made by the investment bank? Briefly comment on this transaction from the investment bank's perspective
Determine the issue price of the debenture : At the time of issuing the securities, the market requires a rate of return of 12 per cent. Determine the issue price of the debenture
Calculate the break-even in units and sales dollars : Variable marketing, distribution and admin costs $8. Annual fixed non-manufacturing costs $128,000. Calculate the break-even in units and sales dollars for 2020
What year unit price would the company have : Assume that the sales quantity estimate remains at 100,000 units per year. What Year 0 unit price would the company have
What is net income : H Mart reports a net cash in-flow of $20,000 from operating activities. Share-based compensation expense of $1,000. What is net income
Give the tax consequences of this exchange to both parties : Give the tax consequences of this exchange to both parties, being sure to show for each taxpayer the realized gain or loss, any recognized gain or loss

Reviews

Write a Review

Financial Accounting Questions & Answers

  Question 11 pretax financial income reported 600002

question 11. pretax financial income reported 600002. depreciation charged for tax purpose is 76000 as well as

  How walmart has done to the industry averages

Do you have any suggestions on things they could be doing to improve these ratios? Please analyze what you found for each of the eight ratios.

  Compute the amount of any liability for compensated absences

Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2013 and 2014.

  Calculate the direct materials input rate variance

The standard direct materials quantity is 1 kilogram per cushion at a cost of $2.50 per kilogram. Calculate the direct materials input rate variance

  Compute the payback period for each project

Compute the payback period for each project. Compute the discounted payback period for each project using a discount rate of 10%. Compute the net present value (NPV) for each project.

  Prepare the journal entries for the year ending June

Prepare the journal entries for the year ending 30 June 2021 and 30 June 2022 (For both Sam Ltd and West Ltd) Show the Lease receipts and payments schedule

  What amounts will be reported on the income statement

Assume that the company's tax rate is 30%. What amounts will be reported on the income statement for income before irregular items and extraordinary items, respectively?

  Depreciation is a process of asset valuation

Identify each statement as true or false. 1. Depreciation is a process of asset valuation, not cost allocation. FalseTrue

  Record the amounts in their proper debit or credit positions

Prepare a corrected trial balance at January 31. List the accounts in numerical order. Record the amounts in their proper debit or credit positions

  What are some products that are tied to your self-image

Describe a painful disposal situation that you have encountered. What was the result? Would you do it differently if you had it to do over again? When it comes to shopping, would you describe yourself as a planner, partial planner, or an impulse purc..

  IRR-NPV and Profitability Index

Consider two projects that your company is evaluating. Project A has cash flows of -25, +11, +12, and +10 at time-zero, one year from now, two years from now, and three years from now, respectively. Project B has cash flows of -50, +22.5, +21.5, and ..

  Classify the change as change in accounting principle

Researching GAAP AICPA Adapted Sometimes a business entity may change its method of accounting for certain items. It may classify the change as a change in accounting principle, a change in accounting estimate, or a change in reporting entity.

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