Frick recognize on the redemption of these bonds

Assignment Help Financial Management

Reference no: EM131131396

On January 1, year 13, Frick Inc. redeemed its fifteen-year bonds of $500,000 par value for 102. They were originally issued on January 1, year 1, at 96 with a maturity date of January 1, year 16. The bond issue costs relating to this transaction were $20,000. Frick did not elect the fair value option for reporting its financial liabilities. Frick amortizes discounts, premiums, and bond issue costs using the straight-line method. What amount of loss should Frick recognize on the redemption of these bonds?

Reference no: EM131131396

Questions Cloud

Company policy to always maintain constant growth rate : Suppose you know that a company’s stock currently sells for $56 per share and the required return on the stock is 10 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it..

Zero book value over the five-year life of the project : A project has an initial requirement of $83,389 for equipment. The equipment will be depreciated to a zero book value over the 5-year life of the project. The investment in net working capital will be $19,548. What is the project’s net present value ..

What is return on stock according to security market line : What is the return on a stock according to the security market line if the risk-free rate is 6 percent, the return on the market is 10 percent, and the stock's beta is 1.5? If the beta had been 2.0, what would be the return? Is this higher return con..

Determine the company wacc by computing : Fast Cash Limited has the following information and a tax rate of 30 percent. . Debt 700, 8 percent coupon bonds outstanding, $1,000 par value, 10 years to maturity, selling for 95 percent of par, the bonds make semi-annual payments Common stock 350,..

Frick recognize on the redemption of these bonds : On January 1, year 13, Frick Inc. redeemed its fifteen-year bonds of $500,000 par value for 102. They were originally issued on January 1, year 1, at 96 with a maturity date of January 1, year 16. The bond issue costs relating to this transaction wer..

Initial investment-what is the equivalent annual annuity : Project A requires an initial investment of $7,500 at t = 0. Project A has an expected life of 4 years with cash inflows of $5,000, $4,500, $900, $2,000 at the end of Years 1, 2, 3, and 4 respectively. The project has a required return of 15%. What i..

How much money would you need to invest : You have your choice of two investment accounts. Investment A is a 12-year annuity that features end-of-month $1,300 payments and has an interest rate of 7.1 percent compounded monthly. How much money would you need to invest in B today for it to be ..

Payments are made at the end of each month : A 15-year annuity pays $2,150 per month, and payments are made at the end of each month. If the interest rate is 9 percent compounded monthly for the first eight years, and 6 percent compounded monthly thereafter, what is the present value of the ann..

User Account

All Pages