The issuance amount per the bond contract is $3,000,000 and the contract carries a stated semi-annual...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The issuance amount per the bond contract is $3,000,000 and the contract carries a stated semi-annual interest rate of 6% with a term of ten (10) years. However, interest rates increased from the time of the contract was prepared and when the bonds were sold. Investors now require a higher rate of return. The bonds sell in the market at an interest rate of 8%. How much cash was raised from this bond issuance? In other words, at what price did the bond issuance sell? The issuance amount per the bond contract is $3,000,000 and the contract carries a stated semi-annual interest rate of 6% with a term of ten (10) years. However, interest rates increased from the time of the contract was prepared and when the bonds were sold. Investors now require a higher rate of return. The bonds sell in the market at an interest rate of 8%. How much cash was raised from this bond issuance? In other words, at what price did the bond issuance sell?
Expert Answer:
Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: ?978-0073379609
15th Edition
Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus
Posted Date:
Students also viewed these accounting questions
-
What should be annual interest rate of an account that is compounded quarterly which returns $1200 interest amount when $6000 is invested in it for three years?
-
Orlando Medicals long-term debt carries an annual interest rate of 11%. During the year ended December 31, 2018, Orlandos times-interest-earned ratio was a. 137.9 times. b. $35,147. c. 20.1 times. d....
-
Tony borrows $2800 at an annual interest rate of 6.0%. He receives the loan on the first day of the current month and will make monthly payments on the first day of each of the following months until...
-
A SQL With respect to database transaction, the ACID concepts should apply! ACID is an acronym for atomicity, consistency, isolation and durability. Please define each of these terms in your own...
-
In this exercise, you will evaluate the individual units at the nominal steady state for purposes of understanding how the plant would operate without recycle. Use Simulink to simulate the lull...
-
The Zwatch Company manufactures trendy, high-quality moderately priced watches. As Zwatch's senior financial analyst, you are asked to recommend a method of inventory costing. The CFO will use your...
-
On 31 May 20x8, the balance sheet of Daponte Trading Ltd appears as follows: During the month of June 20x8, Daponte Trading Ltd had the following summary of transactions: a Received $5,000 from...
-
A corporation issues $18,000,000 of 10% bonds to yield interest at the rate of 8%. (a) Was the amount of cash received from the sale of the bonds greater or less than $18,000,000? (b) Identify the...
-
post-test after. The results are shown in the table below. Pre-test (1) Post-test (2) Difference, d = x2-x1 59 31 -28 57 56 -1 66 48 -18 9 44 36 -8 B 73 67 -6 64 36 -28 59 63 4 72 65 -7 51 44 -7 Can...
-
The following 2 employees are PAID monthly and this is the last payday of the year (Dec). Each employee's taxable part of their wages is listed below. The company is located in Henry County, IN 1....
-
Research and find the following information on Periodic Table What is the meaning of a period and family in the periodic table Usually information is present in a box for an element? How does the...
-
You need to find the height of the tree in the image above. You know that 8 = 29.1. Suppose that D, the distance to the tree from the point at which the angle e was measured, is 25.3 m. What is the...
-
A. Types of defects of a period and frequencies are specified below for a Computer chip company. Provide the analysis in detail-Pareto. 1.Ending outer frame not aligned properly. No of items=10...
-
Find the current purchase price of the bond. ($15,000, 7% bond with a market price of 92.75) ?
-
Highland Co. expects to receive 5 million euros tomorrow as a result of selling goods to the Netherlands. Highland estimates the standard deviation of daily percentage changes of the euro to be 1...
-
FastTrack Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing and absorption costing income statements relating to April and May 2014 2014 are as...
-
Debit Credit Cash $3,250 Accumulated Depreciation-Equipment $500 Accounts Receivable 3,060 Accounts Payable 2,760 Supplies 1,580 Unearned Service Revenue 400 Equipment 10,460 Salaries and Wages...
-
Refer to the table to answer the following questions. Year Nominal GDP (in billions) Total Federal Spending (in billions) Real GDP (in billions) Real Federal Spending (in billions) 2000 9,817 578...
-
Central Duplicating Internal Service Fund. As of September 30, 2010, the Central Duplicating Fund of the Town of Fredericksburg had the following post-closing trial balance: During the fiscal year...
-
Explain how capitalization of interest costs differs for enterprise funds as opposed to governmental funds.
-
Explain how expenditure and revenue classifications for public school systems differ from those for state and local governments.
-
The balance sheets of Parkway plc for 20X7 and 20X8 are given below, together with the profit and loss account for the year ended 30 June 20X8. 1 The freehold land and buildings were purchased on 1...
-
Aspirations Ltd commenced trading as wholesale suppliers of office equipment on 1 January 20X1, issuing ordinary shares of 1 each at par in exchange for cash.The shares were fully paid on issue, the...
-
The historical cost accounts of Smith plc are as follows: 1 Land and buildings were acquired in 20X0 with the buildings component costing 800,000 and depreciated over 40 years. 2 Share capital was...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App