Reference no: EM132592330
Question - On January 1, 2019, Plywood Homes, Inc., issued 20-year, 4% bonds having a face value of $1 million. The interest on the bonds is payable semiannually on June 30 and December 31. The proceeds to the company were $975,000 (i.e., on the day they were issued the bonds had a market value of $975,000). On June 30, 2019, the company's fiscal closing date, when the bonds were being traded at 98.5, each of the following amounts was suggested as a possible valuation basis for reporting the bond liability on the balance sheet.
$975,625 (proceeds, plus six months' straight-line amortization)
$1 million (face value)
$1,780,000 (face value plus interest payments)
Required -
1) Distinguish between nominal and effective interest rates.
2) Explain the nature of the $25,000 difference between the face value and market value of the bonds on January 1, 2019.
3) Between January 1 and June 30, the market value of the company's bonds increased from $975,000 to $985,000. Explain. Discuss the significance of the increase to the company.
4) Evaluate each of the three suggested alternatives for reporting the bond liability on the balance sheet, giving arguments for and against each alternative. Your answer should take the investor and the reporting company into consideration.
Interview special education teacher
: Interview a special education teacher, a general education teacher, an administrator, a teacher's aide, and one special area teacher
|
What will the balance be on December
: If $20000 is deposited annually starting on January 1, 2017 and it earns 7%, what will the balance be on December 31, 2024
|
Evaluate effectiveness of 21st-century teaching and learning
: Evaluate effectiveness of 21st-century teaching and learning. Analyze how you can maintain high standards and demonstrate high expectations for all ethnically
|
Symptoms of clinical deterioration
: Identify and discuss two (2) signs or symptoms of clinical deterioration associated with the presenting problem, from chosen case study
|
Distinguish between nominal and effective interest rates
: On January 1, 2019, Plywood Homes, Inc., issued 20-year, 4% bonds having a face value of $1 million. Distinguish between nominal and effective interest rates
|
Stages of christ career does the philippians hymn portray
: What three stages of Christ's "career" does the Philippians hymn portray? What is the main purpose of Paul's first letter to the Thessalonians?
|
Calculate Sheridan recognize gain
: On December 31, 2017, the equipment was sold for $117500. As a result of this sale, calculate Sheridan recognize gain
|
Performance and safety in school
: Educators sometimes need access to student's medical information when it relates to their performance and safety in school.
|
How process costing systems used to track production costs
: How are process costing systems used to track the production costs of individual products? What are the potential problems
|