User Account

All Pages

Determine the price of the bonds at January

Assignment Help Accounting Basics
Reference no: EM132740428

Question - On January 1, 2021, Instaform, Inc., issued 12% bonds with a face amount of $55 million, dated January 1. The bonds mature in 2040 (20 years). The market yield for bonds of similar risk and maturity is 14%. Interest is paid semiannually.

Required -

1-a. Determine the price of the bonds at January 1, 2021.

1-b. Prepare the journal entry to record their issuance by Instaform.

2-a. Assume the market rate was 11%. Determine the price of the bonds at January 1, 2021.

2-b. Assume the market rate was 11%. Prepare the journal entry to record their issuance by Instaform.

3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.

Reference no: EM132740428

Questions Cloud

Determine the costs to be considered in determining optimal : Determine the costs to be considered in determining the optimal company policy for sales by Home. The annual contributions and costs
Advertising in nursing-professional publications : Select a specific health care service, facility, or other health sector-related occupation.
Record the journal entries in the records of Rest Haven Ltd : May 31 Rest Haven Ltd honoured its bill drawn on Commercial Bank of Australia. Record the journal entries in the records of Rest Haven Ltd
Federal governmental agencies that need to be involved : Description of the Program. Any local, state, or federal governmental agencies that need to be involved in your program.
Determine the price of the bonds at January : The market yield for bonds of similar risk and maturity is 14%. Assume the market rate was 11%. Determine the price of the bonds at January 1, 2021
Evaluating capital investment proposals : Methods of evaluating capital investment proposals that ignore present value include? net present value and internal rate of return
Compute the amounts to be reported for the year : Wage and Tax Statement Data on Employer FICA Tax - Compute the amounts to be reported for the year on each employee's Wage and Tax Statement
What is the company annual cost of new preferred stock : What is the company's annual cost of new preferred stock financing? A company's perpetual preferred stock has a par value of $65 per share
Customer bases through smartphones and social media : What ethical dilemmas do marketing professionals face in gathering information on customer bases through smartphones and social media?

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