User Account

All Pages

Estimate the fair value of the bonds at december

Assignment Help Accounting Basics
Reference no: EM131804759

Question - On January 1, 2011, Essence Communications issued $830,000 of its 5-year, 7% bonds for $764,327. The bonds were priced to yield 9%. Interest is payable semiannually on June 30 and December 31. Essence Communications records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2011, the market interest rate for bonds of similar risk and maturity was 8%. The bonds are not traded on an active exchange.

a. Using the information provided, estimate the fair value of the bonds at December 31, 2011 (Round the PV Factor to 5 decimal places, intermediate and final answer to the nearest dollar amount)

b. Prepare the journal entry to record interest on June 30, 2011 (the first interest payment). (Round the PV Factor to 5 decimal places, intermediate and final answer to the nearest dollar amount)

c. Prepare the journal entry to record interest on December 31, 2011 (the second interest payment). (Round the PV Factor to 5 decimal places, intermediate and final answer to the nearest dollar amount)

d. Prepare the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2011, balance sheet.(Round the PV Factor to 5 decimal places, intermediate and final answer to the nearest dollar amount)

Reference no: EM131804759

Questions Cloud

Importance-marketing managers of current demographic trends : Explain the importance to marketing managers of current demographic trends. Today, several basic demographic patterns are influencing marketing mixes.
Strengths and weaknesses of the bsc built at the bank : What are the strengths and weaknesses of the BSC built at the bank?
What philosophies of ethics would you recommend : Based on that, recommend best practices for a company that wants to expand its operations abroad. What philosophies of ethics would you recommend.
Negotiating advantage of time : 1. In what circumstance does Mary have the negotiating advantage of TIME? 2. In what circumstance does Mary have the negotiating advantage of INFORMATION?
Estimate the fair value of the bonds at december : On January 1, 2011, Essence Communications issued $830,000 of its 5-year, estimate the fair value of the bonds at December 31, 2011
Neural network predicts movie success : Consider the neural network developed by Ramesh Sharda and Dursun Delen to determine whether a new movie will be successful or not.
Explain the importance of multiculturalism : Explain the importance to marketing managers of multiculturalism and growing ethnic markets. Multiculturalism occurs when all major ethnic groups.
Discuss key financial performance indicators : Give some exam of key financial performance indicators, Give some examples of key customer and operating performance indicators
Looking for a new chief financial officer : ACME Inc. is looking for a new Chief Financial officer (CFO). Acme is Fortune 1000 corporation with 11 manufacturing facilities in nine states and over 11,000.

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