Energy Ltd. is authorized to issue $3,000,000 of 1%, 10-year bonds payable. On December 31, 2021, when
Question:
Energy Ltd. is authorized to issue $3,000,000 of 1%, 10-year bonds payable. On December 31, 2021, when the market interest rate is 8%, the company issues $2,400,000 of the bonds. Energy 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 1258413 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...
-
Water flowing in a positive x-direction passes through a 90 elbow in a 6-inch-diameter pipeline and heads in a positive y-direction with a flow rate of 3.05 ft3/sec. Compute the magnitude and...
-
A deep space probe mission is planned to explore the composition of interstellar space. Assuming the three most important objects in the solar system for this project are the Sun, the Earth, and...
-
write email for my manager , that i want to work on Tuesday Wednesday instead of Thursday Friday, for this week only because I have school exam that I need to prepare for.
-
E-Z-Boy Furniture makes sofas, loveseats, and recliners. The company allocates manufacturing overhead based on direct labor hours. E-Z-Boy estimated a total of \($2\) million of manufacturing...
-
Gumchara Corporation reported the following information with respect to the materials required to manufacture amalgam florostats during the current month: Standard price per gram of materials . . . ....
-
We have defined a PyTorch network class DAN for you. You need to implement the forward pass for your deep averaging network. To start, first implement average that averages the words in a review and...
-
The Cocoa Factory manufactures and distributes chocolate products. It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk-chocolate liquor...
-
On June 30, 2021, the market interest rate is 9%. Randall Corporation issues $600,000 of 10%, 15-year bonds payable. The bonds pay interest on June 30 and December 31. The company amortizes bond...
-
Green Earth Homes, Inc., builds environmentally sensitive structures. The companys 2021 revenues totaled $2,770 million. At December 31, 2021 and 2020, the company had, respectively, $663 million and...
-
In problem the given vectors are solutions of a system X' = AX. Determine whether the vectors form a fundamental set on the interval (-, ). -2. X2 X, -1,
-
1. Cut out the boxes below on the dotted lines. Be careful not to lose any of the slips! 2. Organize the boxes based on what business you think the productive resource would be used in. Your choices...
-
On Abbot Kinney blvd, there are two coffee shops near each other. Blue bottle and intelligentsia. Blue bottle used to sell 1k cups of coffee per week. When intelligentsia lowered its prices by...
-
1. Explain Related Literature Reflection (NATO)U.S. Military Policy and Defense Policy 2. Reflect on past research possibilities of U.S. Military Policy and Defense Policy 3. Compare and contrast...
-
Find the following probabilities based on the standard normal variable Z. (You may find it useful to reference the z table. Round your answers to 4 decimal places.) a. P(-0.99 Z -0.43) b. P(0.1 Z...
-
I have collected real data on the sale of a microwavable cup of soup across 20 different cities for the same time period (a month). The variables in the dataset are: Quantity sold in the city for...
-
Write the following measurements, without scientific notation, using the appropriate SI prefix. a. 4.851 106 g b. 3.16 102 m c. 2.591 109 s d. 8.93 1012 g
-
Making use of the tables of atomic masses, find the velocity with which the products of the reaction B10 (n, ) Li7 come apart; the reaction proceeds via interaction of very slow neutrons with...
-
What principle(s) of internal control is (are) involved in making daily cash counts of over-the-counter receipts?
-
(a) What is a voucher system? (b) What principles of internal control apply to a voucher system?
-
(a) Identify the three activities that pertain to a petty cash fund, and indicate an internal control principle that is applicable to each activity. (b) When are journal entries required in the...
-
Provide an actual example to illustrate how International AIDS society engages in ethical treatment of employees and show that the benefits outweigh the costs. Also explain that this is contributes...
-
What you would do with the Sanford High situation. talk about what you see as the issues in the case, and what steps would you recommend as a mediator to address the conflict(s) - think especially...
-
When entrepreneurs decide to exit their business, they follow one or more exit strategies, sometimes called harvest methods. Each exit strategy has major implications for the decisions an...
Study smarter with the SolutionInn App