Hadley Ltd. is authorized to issue $5,000,000 of 4%, 10-year bonds payable. On December 31, 2014, when
Question:
Requirements
1. Use the PV function in Excel to calculate the issue price of the bonds.
2. Using Exhibit 9-4 as a model, prepare a bond amortization table for the term of the bonds.
3. Record issuance of the bonds payable on December 31, 2014; the first semiannual interest payment on June 30, 2015; and the second payment on December 31, 2015.
Step by Step Answer:
Req 1 Using the PV function in EXCEL the issue price of the bonds is 3688217 Req 2 amortization tabl...View the full answer
Financial Accounting
ISBN: 978-0133427530
10th edition
Authors: Walter Harrison, Charles Horngren, William Thomas
Related Video
The present value of future cash flows is calculated to determine the value today of a stream of future cash flows. It is calculated by discounting the future cash flows to their present value using a discount rate. The discount rate reflects the time value of money and the risk of the cash flows. It is important because it helps in making investment decisions, capital budgeting, loan decision making, and financial planning. By discounting future cash flows to their present value using a discount rate, it takes into account the time value of money and the risk associated with the cash flows. This allows investors, lenders, and financial planners to evaluate the viability of potential investments, projects, or loan applications, and to estimate the future value of investments or savings. calculating the present value of future cash flows is important in making investment decisions, capital budgeting, loan decision making, and financial planning. It helps to determine the viability of long-term projects, evaluate loan applications, and estimate the future value of investments or savings.
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