User Account

All Pages

What is the sales price for this bond

Assignment Help Accounting Basics
Reference no: EM132846332

Question - On January 1, Year One, Big Company offers to sell a $100,000 bond coming due in exactly 10 years. This bond pays cash interest of 2 percent at the end of each year. A buyer is found who wants to earn 5 percent interest each year. After some negotiation, Big agrees to the 5 percent effective rate. The present value of a single amount of $1 in ten years at 2 percent annual interest is .80 whereas the present value of a single amount of $1 in ten years at 5 percent annual interest is .63. The present value of an annuity of $1 in ten years at 2 percent annual interest is 8.75 whereas the present value of an annuity of $1 in ten years at 5 percent annual interest is 7.70. What is the sales price for this bond?

Reference no: EM132846332

Questions Cloud

What should the company report as additional paid-in capital : A company issues 10,000 shares of $10 par value common stock for $23 in cash per share. What should the company report as additional paid-in capital
Prepare the bank account of berol limited in general ledger : Berol Limited has a fixed deposit of R400, 00 at the bank. Prepare the bank account of Berol Limited in the general ledger
Determine company performs better with or without a bonus : Imagine you are interested in determining whether an employee of a company performs better with or without a bonus. What are some issues that could affect
What are the personal or communal ethical factors : What are the personal and/or communal ethical factors that may be involved in determining the moral position of either side given a contemporary debate,
What is the sales price for this bond : On January 1, Year One, Big Company offers to sell a $100,000 bond coming due in exactly 10 years. What is the sales price for this bond
Evaluate the implication of policies in the lives of clients : Demonstrate critical thinking skills that can be used to inform policymakers and influence policies that impact clients/constituents and services.
What is the current value of the company : Suppose that your all-equity firm wants to raise $12M in equity to finance a new project. What is the current value of the company
How might medication management errors in accomplishing task : How might medication management errors or slowness in accomplishing tasks with age-related vision loss might be mistaken as evident for other problems
What amount should be reported as gain on sale of bonds : During the period that the entity held this investment, amortization of the discount amounted to P20,000. What amount should be reported as gain on sale of bond

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