Question evaluate the market value of the given bond8 bonds

Assignment Help Financial Accounting

Reference no: EM13348913

Question :

"Evaluate the market value of the given bond:

8% bonds of $150,000 sold 30 months after bond issue date. 15-year life, interest payable twice yearly. Effective rate of 10%."

Determine the net present value considering the bond was sold at issue date at its discount, and that number I get is $126,945. What I am unsure of how to do is plugging in the 30 months after. It was sold at a discount of $23,055. It assumes amortize it over the 15 years for a net each year of $1,537 yearly, and then take that time the 2.5 years, which is $3,843. Then subtract this to the original bond amount of $150,000.

So essentially, is my answer of $146,157 right?

2) This one, need more assistance on:

"Consider that $140,000 of X Company's 8% bonds is sold on the issue date for $128,598. Interest is payable twice a year, and the bonds have a 15 year life. The purchase price gives a 9% return on investment. What entries could be made for the first interest payment for both the investor and X Company using the straight-line technique the effective-interest method?"

What is throwing me off is the 9% return on investment

Reference no: EM13348913

Questions Cloud

Question 1an era of change there has been a revolution in : question 1an era of change there has been a revolution in the management of the public sectors of complex countries.

Question 1 process solutions gives a computer-based : question 1 process solutions gives a computer-based document processing service. the accountant has produced the

Question 1i given new challenges the public sector is : question 1i given new challenges the public sector is facing to what extent can npm help it in dealing with them?ii

Question 1 management in public domain has its own : question 1 management in public domain has its own specificity and is very dissimilar from management in the private

Question evaluate the market value of the given bond8 bonds : question evaluate the market value of the given bond8 bonds of 150000 sold 30 months after bond issue date. 15-year

Question a company has made the subsequent purchases of : question a company has made the subsequent purchases of merchandise during the month of julyjuly 1 purchased 380 units

Questionshow the entitys assessment of and satisfaction : questionshow the entitys assessment of and satisfaction with the ais in fulfilling the gets of the entity. add the

Question 1 public sector management is conditioned by : question 1 public sector management is conditioned by political and managerial values that have an influence on

Question draft the appropriate audit opinion provided the : question draft the appropriate audit opinion provided the subsequent scenarios. every situation is independent of the

User Account

All Pages