Question: Debt Investment: Bonds Purchased at a Discount On July 1, 2023, Masterwear Corp. issued $700,000 of 12% bonds, dated July 1. * Interest of $42,000

Debt Investment: Bonds Purchased at a Discount On July 1, 2023, Masterwear Corp. issued $700,000 of 12% bonds, dated July 1. * Interest of $42,000 is payable semiannually on June 30 and December 31. * The bonds mature in three years, on June 30, 2026. * United Inc. purchased the entire bond issue on a date when the market interest rate for bonds of similar risk and maturity was 14%. Calculation of the Bond Price Interest $ 42,000 x 4.76654 = $200,195 Principal (face amount) S$700,000 x 0.66634 466,438 Present value (price) of the bonds $666,633 Present value of $1 table: Present value of an ordinary annuity n=6,i=7% of S1table:n=6,i=7%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

can someone show me how to do this with a finance calculator On July 1, 2021, Masterwear Industries issued $700,000 of 12% bonds, dated July 1. Interest of $42,000 is payable semiannually on June 30...

On July 1, 2021, Mastenvear Industries issued $690,000 of 6% bonds, dated July 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 3 years, on June 30 of the final...

On July 1, 2021, Lejune Industries issued $410,000 of 6% bonds, dated July 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 4 years. Fourier, Inc. purchased the...

On July 1, 2021, Lejune Industries issued $540,000 of 7% bonds, dated July 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 3 years. Fourier, Inc. purchased the...

On January 1, 2016, Masterwear Industries issued $700,000 of 12% bonds, dated January 1. Interest of $42,000 is payable semiannually on June 30 and December 31. The bonds mature in three years. The...

On July 1, 2023, Masterwear issued $700,000 of 12% bonds, dated July 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in three years. The market interest rate for...

Adjusted Trial Balance, Astro Inc For the year ended December 31, 2017 (LISTED IN ALPHABETICAL ORDER) Credit Debit Accounts payable 21,000 Accounts receivable 58,000 Accrued liabilities 33,000...

QUESTION #1 On January 1, 2018, Kohl Corporation issued $700,000, 8%, 10-year bonds at face value. Interest is payable semiannually on July 1 and January 1. Kohl Corporation has a calendar year end....

On July 1 , 2 0 2 5 , Beauty Hotels Corp. issued $ 6 0 0 , 0 0 0 of 1 0 % bonds, dated July 1 . The bonds mature in ten years, and interest is payable semiannually on June 3 0 and December 3 1 . The...

2. Suppose that a two-arm clinical trial is being designed to test if a new drug is equivalent to the existing drug in delaying terminally ill liver cancer patients. Suppose that two drugs will be...

The first appearance in print of l Hospitals Rule was in the book Analyse des Infiniment Petites published by the Marquis de l Hospital in 1696. This was the first calculus textbook ever published...

which of the following assumptions are commonly used to forecast inventory? select all that are correct. 1 . DAYS IN PERIOD 2 . inventory days 3 . cost of sales 4 . capital expenditure 5 . revenue

A summary of revenue and expenses for a specific period of time is a(n): a. income statement. b. balance sheet. c. statement of cash flows. d. retained earnings statement.

The contrapositive of PAQ P is P v(~Pv~Q). O True O False QUESTION 8 In the universe U=R. the truth value of (Vy)(x)(xsy) is: True False

Describe the various value creation activities carried out by the retail company Department Store!

6.S2. Assessing the Capacity of a Pipeline Network Exxo 76 is an oil company that operates the pipeline network shown below, where each pipeline is labeled with its maximum flow rate in million cubic...

Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $1,870 for gasoline on these trips. His depreciation on the car if he was using it fully for...

Tori and some other childeen experimented with balls to see which ones rolled. First using a piece of cardboard to use as a ramp, they angled it on a block to the floor to test the balls. Then Tori...

What types of small businesses would benefit from having ISO 9000 certification? Appendix

Explain the difference between forward and backward scheduling. Appendix

You have read about ISO 9000 certification in both Chapter 15 and this chapter. Bearing in mind that such certification is both time consuming and expensive, describe what type of small business...