Rand Limited is a resident of the Republic of South Africa and has a 30 June...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rand Limited is a resident of the Republic of South Africa and has a 30 June financial year end. Since government bonds are considered to be low-risk investments, Rand Limited purchased government bonds on 1 December 2022 for R237 890. Rand Limited earns interest at a coupon rate of 6.9% per annum, payable six-monthly on the nominal value of R270 000. These government bonds mature on 31 May 2024 at the nominal value of R270 000. REQUIRED: 4.1. Calculate the yield-to-maturity applicable to the government bond transaction. Clearly show all your financial calculator inputs. 4.2. 4.3. (7 marks) Calculate the total interest accruing to Rand Limited during the 2023 and 2024 years of assessment by applying the yield to maturity method prescribed in section 24J. (17 marks) Compare the total section 24J interest calculated in question 4.2. with the total interest deemed to be accrued according to cash flows. (7 marks) Rand Limited is a resident of the Republic of South Africa and has a 30 June financial year end. Since government bonds are considered to be low-risk investments, Rand Limited purchased government bonds on 1 December 2022 for R237 890. Rand Limited earns interest at a coupon rate of 6.9% per annum, payable six-monthly on the nominal value of R270 000. These government bonds mature on 31 May 2024 at the nominal value of R270 000. REQUIRED: 4.1. Calculate the yield-to-maturity applicable to the government bond transaction. Clearly show all your financial calculator inputs. 4.2. 4.3. (7 marks) Calculate the total interest accruing to Rand Limited during the 2023 and 2024 years of assessment by applying the yield to maturity method prescribed in section 24J. (17 marks) Compare the total section 24J interest calculated in question 4.2. with the total interest deemed to be accrued according to cash flows. (7 marks)
Expert Answer:
Answer rating: 100% (QA)
41 To calculate the yieldtomaturity we need to input the following information into a financial calc... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
Students also viewed these accounting questions
-
Bytes (Pty) Ltd (Bytes or the company is a manufacturer of laptops. Bytes is a resident of the Republic and is not considered to be a small business corporation. The company has a February financial...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
A particle moves with a velocity 5i - 3j +6k under the influenceof a constant force F= 20i+10j+15k. What is the instantaneous powerof a particle? I understand that Power = F . V and we can get...
-
Exercises 11-16: For the measured quantity, state the set of numbers that most appropriately describes it. Choose from the natural numbers, integers, and rational numbers. Explain your answer....
-
A boy whirls a ball on a string in a horizontal circle of radius 0.8 m. How many revolutions per minute must the ball make if the magnitude of its centripetal acceleration is to be the same as the...
-
________________ management assumes people are complex, with widely varying needs. (a) Classical (b) Neoclassical (c) Behavioral (d) Modern
-
Following is a sample of 10 matched pairs. Let 1 and 2 represent the population means and let d = 1 2. A test will be made of the hypotheses H0: d = 0 versus H1: d 0. a. Compute the differences. b....
-
You are an industry analyst who specializes in an industry where the market inverse demand is P 200 4Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost...
-
Gad Company has $ 4 0 , 0 0 0 cash at the beginning of March and budgets $ 2 5 0 , 0 0 0 in cash receipts from sales and $ 3 0 2 , 5 0 0 in cash payments during March. The company s preliminary cash...
-
Which of the following is a positive reason for learning chemistry? (a) Chemistry is relevant to daily life (b) Chemistry offers career opportunities (c) Chemistry studies interesting topics (d)...
-
Refer to the following figure. If BDC = 100 and VCE(sat) = 0,1 V,the value of IC(sat) is equal to-------, 10 V 4.7 kn Re VIN O- Poc 200 1.2 Ma O a. 1.8 mA O b. 18 mA O.7.96 mA O d. none of the...
-
Suppose a pendulum is Z meters long. The time, t, in seconds that it takes to swing back and forth once is given by t = 2.01 L. If a pendulum is 9.61 meters long, how long does it take to swing back...
-
Rewrite as a logarithmic equation. 1 0 ^ y = 3
-
Initial margin requirement is 50%. A customer is buying 100 shares on margin at $50 per share. What is minimum cash required in account to complete transaction?
-
Write the equation of the line that passes through the points (-9, -4) and (-5,-1). Put your answer in fully simplified point-slope form, unless it is a vertical or horizontal line.
-
PT. TPI will conduct a rights issue under the following conditions. Each owner 2 sheets old shares have the right to buy 1 new share at a price of IDR 3000 per share. Amount 100 million old shares...
-
Network management enables administrators to maintain the network's performance and availability by managing and monitoring it. In your opinion: What difficulties do teams or administrators in...
-
Inexhaustible collections of ONPOs are not required to be capitalized or depreciated, if certain criteria are met. Why is this so, and what accounting and reporting recognition, if any, is required...
-
A parent company may want to shift profits to the controlling interest and may use intercompany capital leases to accomplish that end. Is there an opportunity to do that with both direct financing...
-
Determine the correct value for each of the following questions: 1. Assuming that a single person has made taxable lifetime gifts of $1.2 million, what is the largest taxable estate that could exist...
-
Magna Company is the parent company that owns an 80% interest in Metros Company. The interest was purchased at book value, and the simple equity method is used to record the ownership interest. The...
-
The ages of residents of Banks City, Oregon, are given in the following frequency distribution. a. Approximate the mean age. b. Assume all three people aged 9099 were in fact 90 years old. Would this...
-
The following frequency distribution presents the amounts, in dollars, spent for Valentines Day gifts in a survey of 123 U.S. adults. a. Approximate the mean amount spent on Valentines Day gifts. b....
-
The following frequency distribution presents the number of U.S. adults (in thousands) ages 25 to 74 who have earned a Bachelors degree in a recent year. a. Approximate the mean age. b. If the...
Study smarter with the SolutionInn App