Determine the semi-annual effective interest rate

Assignment Help Financial Accounting
Reference no: EM132813138

Question - On 1 January 20x1, Feel makes a 3-year loan of $600,000 to Fancy Ltd ("Fancy") with an annual interest rate of 4% payable semi-annually at the end of June and December. Feel pays legal fees of $20,000 in relation to the preparation of the loan agreement. Feel has no intention to sell the loan, and intends to collect the interest and principal payments only. Feel receives all interest payments from Fancy in year 20x1.

From Feel's perspective, determine the semi-annual effective interest rate of the loan on 1 January 20x1.

Reference no: EM132813138

Questions Cloud

What is the country government : What is the country's government doing to fix the issues of the negative externality?
Preference between return and risk for the portfolio : A moderately risk-averse investor has 50 percent of her portfolio invested in stocks and 50 percent invested in risk free Treasury bills.
Find the compound interest : If $40,000 is invested for 6 years at 5% compounded quarterly. Find the compound interest. Find the compound amount
Draw a graph of melinda budget constraint : Melinda earns $400 a month from her part-time job. She buys only two goods: X and Y. Good X costs $20 each and good Y costs $40 each.
Determine the semi-annual effective interest rate : Feel pays legal fees of $20,000 in relation to the preparation of the loan agreement. Determine the semi-annual effective interest rate
Car seat under florida v. jimeno : If proper consent was provided, was the officer allowed to search under the car seat under Florida v. Jimeno? Explain.
What are the access-to-care issues in the given situations : What are the access-to-care issues in the given situations? Suggest at least two solutions to address the access-to-care issues in these scenarios.
Compute the current yield on both bonds : Bond A pays $180 annual interest with semiannual payment and has a market value of $880. Compute the current yield on both bonds
Compute the? bonds yield to maturity : Compute the? bond's yield to maturity. ?Fingen's 16?-year, ?$1,000 par value bonds pay 8 percent interest annually. The market price of the bonds

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is amount of revenue reported on the income statement

What is the amount of total assets at the end of the accounting period and what is the amount of revenue reported on the income statement

  What is the current stock price

If you expect a constant growth rate of 3.25 percent, and have a required rate of return of 11.53 percent, what is the current stock price

  Find how much cash would a receive

Assume that the $10,000 is paid out in question 1, so now the partnership has $40,000 in cash. How much cash would A receive (xx,xxx)?

  Unlimited life of company

Unlimited life of company that continues in existence after original owners die or leave the company

  Direct material costs be incurred after split off point

What exact labor and overhead costs would be incurred, both before and after split off point? Again, be precise here in terms of what you believe would need to be incurred.

  What are the net proceeds to New Edmonton Furniture

The company also pays underwriting fees of 3.5% on the face value of the bonds. What are the net proceeds to New Edmonton Furniture from the bond issue

  Illustrate what is the total dividend that will be paid

Illustrate what is the total dividend that will be paid for Preferred stock? If the Preferred stock listing stated $3 instead of 3% would that change the total dividend amount? Why?

  Has wruck enterprises made a gain or a loss

The exchange rate has dropped to 9 U.S. cents per peso. Has Wruck Enterprises made a gain or a loss due to the exchange rate change, and how much?

  Explain how the assessment of a client financial condition

Explain how the assessment of a client’s financial condition can affect the auditor’s decisions concerning evidence accumulation in later phases of the audit.

  Calculate the terminal value of the plan

Calculate the terminal value of the 401(k) plan for Option 2, assuming all returns and contributions remain constant over the 15 years

  Question investments in noncurrent operating assets-

question investments in noncurrent operating assets- retirement and utilization problems lo6 wild expansion co.

  How do the two companies account for r and d expenditures

Katy's and Mike's R&D expense includes many different types of costs. List three specific costs included in R&D expense on the income statement.

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