Winter Ltd. is authorized to issue $2,500,000 of 4%, 10-year bonds payable. On December 31, 2021, when
Question:
Winter Ltd. is authorized to issue $2,500,000 of 4%, 10-year bonds payable. On December 31, 2021, when the market interest rate is 5%, the company issues $2,000,000 of the bonds. Winter amortizes bond discount using the effective-interest method. The semiannual interest dates are June 30 and December 31.
Requirements
1. Use the PV function in Excel to calculate the issue price of the bonds.
2. Prepare a bond amortization table for the term of the bonds using Excel.
3. Record the issuance of the bonds payable on December 31, 2021; the first semiannual interest payment on June 30, 2022; and the second payment on December 31, 2022.
Step by Step Answer:
Req 1 Using the PV function in EXCEL the issue price of the bonds is 1844108 Req 2 amortization tabl...View the full answer
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.
Students also viewed these Business questions
-
On December 31, 2014, when the market interest rate is 10%, OBrien Realty issues $ 800,000 of 7.25%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the...
-
On December 31, 2016, when the market interest rate is 14%, McCann Realty issues $400,000 of 11.25%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the...
-
On December 31, 2016, when the market interest rate is 10%, Timmony Realty issues $450,000 of 7.25%, 10-year bonds payable. The bonds pay interest semiannually. The present value of the bonds at...
-
You measure the length of a distant car to be sub-tended by an angular distance of 1.5o. If the car is actually 5.0 m long, approximately how far away is the car?
-
Obtain two or three quotes on the costs of renter's insurance in your area. (This can be done in about 10 minutes at www.answerfinancial.com, www.insure.com, or similar Web site.) Report on the price...
-
Derive equation (4.1) for the total sample of the two-sample t-test. Data from Equation 4.1 n = 2 40 (21-a/2 + 21-3)
-
Using either Skechers USA, Inc. most current Form 10-K or the companys annual report, answer the questions below. To obtain the Form 10-K use either the EDGAR system following the instructions in...
-
Compute cost of goods manufactured.
-
Bullying is a problem at any age but especially for students aged 12 to 18. A study showed that 7.2% of all students in this age bracket reported being bullied at school during the past six months...
-
On June 30, 2021, the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year bonds payable. The bonds pay interest on June 30 and December 31. The company amortizes bond...
-
On January 31, 2021, Dunkin Logistics, Inc., issued five-year, 3% bonds payable with a face value of $8,000,000. The bonds were issued at 93 and pay interest on January 31 and July 31. Dunkin...
-
Visit www.ftc.gov (FTC site that has Green Guides as well as recent modifications) and write a report about several acceptable and unacceptable advertising practices relating to green marketing.
-
Which of the following is NOT a characteristic of an asset-backed sukuk? a. Sukuk holders own a share of a specific tangible asset. b. Sukuk holders will not have recourse to the originator in case...
-
What is a metric? What is a KPI?
-
Mila is a milk cooperative of 2,600 small dairy farmers in northern Italy (South Tyrol). The dairy industry represents a unique agribusiness sector: dairy production is an agricultural commodity and...
-
Is a return statement always required? If not, why not?
-
How do casual gamers differ from hardcore gamers? Are social gamers casual, a hybrid of casual and hardcore, or a new segment of gamer all together?
-
Let X have density fx(x) = 25xe-5x for 0 < x and fx(x) = 0 otherwise. Find Var(X).
-
A copper sphere of 10-mm diameter, initially at a prescribed elevated temperature T;, is quenched in a saturated (1 atm) water bath. Using the lumped capacitance method, estimate the time for the...
-
(a) What is the primary source document for recording (1) cash sales, (2) credit sales. (b) Using XXs for amounts, give the journal entry for each of the transactions in part (a).
-
Prepare the closing entries for the Sales account, assuming a balance of $200,000 and the Cost of Goods Sold account with a $145,000 balance.
-
Identify the distinguishing features of an income statement for a merchandising company.
-
Assume baseball tickets and bobble head dolls are complements. If a $3 tax is imposed on baseball tickets, how will that affect the market for bobblehead dolls?
-
In 2020, the Broadway Boat Bar (an event venue) saw a substantial drop in bookings despite the management decreasing the rental price. On a separate sheet of paper, draw a Supply and Demand diagram...
-
Respond to information request Blue Bell Pty Ltd is a growing manufacturing organisation and has appointed you as their Junior Management Accountant to replace the previous person who left the...
Study smarter with the SolutionInn App