A company issues $50,000 of 4% bonds, due in 5 years, with interest payable semiannually. Assuming...

Question

Question

A company issues $50,000 of 4% bonds, due in 5 years, with interest payable semiannually. Assuming a market rate of 3%, the b

business accounting

Answer 1

Answer #1

Answer : $ 52,091

cash interest = $ 50,000*4%*6/12 = 1,000

Interest Expenses = 52,306* 3%*6/12 = 784.59

Bond Premium amortization = 1000-784.59= 215.41

Bond Carrying Value After First semiannulal interest Paymnet = 52,306-215,41 = $52,091 (Answer)

Answer 2

Similar Homework Help Questions

A company issues $50,000 of 4% bonds, due in 5 years, with interest payable semiannually. Assuming...

A company issues $50,000 of 4% bonds, due in 5 years, with interest payable semiannually. Assuming a market rate of 3%, the bonds issue for $52,306. Calculate interest expense as of the first semiannual interest payment 84 Skipped Multiple Choice $1,570. $1,000 $785 $375
A company issues $50,000 of 4% bonds, due in 5 years, with interest payable semiannually. Calculate...

A company issues $50,000 of 4% bonds, due in 5 years, with interest payable semiannually. Calculate the issue price of the bonds, assuming a market interest rate of 5% Multiple Choice $47,835. $52,246 $58,983. $47,812.
Coney Island Entertainment issues $1,400,000 of 7% bonds, due in 20 years, with interest payable semiannually on June 3...

Coney Island Entertainment issues $1,400,000 of 7% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: value: 7.69 points Required information Required: 1. The market interest rate is 7% and the bonds issue at face amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the...

On January 1, Year 1, a company issues $460,000 of 5% bonds, due in 15 years,...

On January 1, Year 1, a company issues $460,000 of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the market interest rate on the issue date is 5%, the bonds will issue at $460,000. Record the bond issue on January 1, Year 1, and the first two semiannual interest payments on June 30, Year 1, and December 31, Year 1. 1. Record the bond issue. 2. Record the...
Concord Corporation issues $550,000 of 9% bonds, due in 9 years, with interest payable semiannually. At...

Concord Corporation issues $550,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Click here to view factor tables. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971.) Issue price of the bonds $
Kingbird Corporation issues $590,000 of 9% bonds, due in 10 years, with interest payable semiannually. At...

Kingbird Corporation issues $590,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds.

Whispering Corporation issues $560,000 of 8% bonds, due in 10 years, with interest payable semiannually. At...

Whispering Corporation issues $560,000 of 8% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%.Compute the issue price of the bonds.
Wildhorse Corporation issues $410,000 of 9% bonds, due in 9 years, with interest payable semiannually. At...

Wildhorse Corporation issues $410,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%, Compute the issue price of the bonds.
Vaughn Corporation issues $430,000 of 9% bonds, due in 9 years, with interest payable semiannually. At...

Vaughn Corporation issues $430,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds.

Cullumber Corporation issues $550,000 of 9% bonds, due in 9 years, with interest payable semiannually. At...

Cullumber Corporation issues $550,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Issue price of the bonds $