E14.2 (LO 1, 2) Video Finance (Information Related to Various Bond Issues) Anaconda Inc. has issued...

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E14.2 (LO 1, 2) Video Finance (Information Related to Various Bond Issues) Anaconda Inc. has issued three types of debt on January 1, 2023, the start of the company's fiscal year: 1. $10 million, 10-year, 13% unsecured bonds, with interest payable quarterly, priced to yield 12% 2. $2.5 million par of 10-year, zero-coupon bonds at a price to yield 12% per year 3. $15 million, 10-year, 10% mortgage bonds, with interest payable annually to yield 12% Instructions Prepare a schedule that identifies the following items for each bond: a. The maturity value b. The number of interest periods over the life of the bond c. The stated rate for each interest period (round to two decimal places) d. The effective interest rate for each interest period (round to two decimal places) e. The payment amount per period f. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the present value of the bonds at the date of issue. (Hint: Refer to Chapter 3 for tips on calculating.) Round to the nearest dollar. g. Each instrument has different features. Comment on how the instruments are different, discussing the underlying nature of the debt. Which bonds are riskiest and why? LLUR MU your answers to parto (a) an angewa E14.21 (LO 3) (Entries for Retirement and Issuance of Bonds) Video Jyoti Inc. had outstanding $10 million of 8% bonds (interest payable March 31 and September 30) due in 12 years. Jyoti was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $5 million of 10-year, 6% bonds (interest payable July 1 and January 1) at 97. The proceeds plus additional cash was used to call the 8% bonds at 105 on October 1. The unamortized bond discount for the 8% bonds was $1.1 million on October 1. Jyoti prepares financial statements in accordance with IFRS. E14.2 (LO 1, 2) Video Finance (Information Related to Various Bond Issues) Anaconda Inc. has issued three types of debt on January 1, 2023, the start of the company's fiscal year: 1. $10 million, 10-year, 13% unsecured bonds, with interest payable quarterly, priced to yield 12% 2. $2.5 million par of 10-year, zero-coupon bonds at a price to yield 12% per year 3. $15 million, 10-year, 10% mortgage bonds, with interest payable annually to yield 12% Instructions Prepare a schedule that identifies the following items for each bond: a. The maturity value b. The number of interest periods over the life of the bond c. The stated rate for each interest period (round to two decimal places) d. The effective interest rate for each interest period (round to two decimal places) e. The payment amount per period f. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the present value of the bonds at the date of issue. (Hint: Refer to Chapter 3 for tips on calculating.) Round to the nearest dollar. g. Each instrument has different features. Comment on how the instruments are different, discussing the underlying nature of the debt. Which bonds are riskiest and why? LLUR MU your answers to parto (a) an angewa E14.21 (LO 3) (Entries for Retirement and Issuance of Bonds) Video Jyoti Inc. had outstanding $10 million of 8% bonds (interest payable March 31 and September 30) due in 12 years. Jyoti was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $5 million of 10-year, 6% bonds (interest payable July 1 and January 1) at 97. The proceeds plus additional cash was used to call the 8% bonds at 105 on October 1. The unamortized bond discount for the 8% bonds was $1.1 million on October 1. Jyoti prepares financial statements in accordance with IFRS.

Answer rating: 100% (QA)

E142 Schedule of Bond Information Bond Maturity Value M Number of Interest Periods Stated Rate per Interest Period Effective Interest Rate per Interest Period Payment Amount per Period M Present Value ... View the full answer