On January 1, 2017, when the current market interest rate was 8%, Waveland Corporation issued $120,000,000,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2017, when the current market interest rate was 8%, Waveland Corporation issued $120,000,000, 5-year bonds. The bonds pay an annual coupon rate of 10%. Interest payments are made semi-annually on June 30th and December 31st REQUIRED: a. At what price should this bond offering sell? b. Create a table showing the amortized premium or discount the first three years of the bonds. c. Prepare the journal entry on the date of the bond issuance. d. Prepare the first two semiannual interest payment journal entries. BOND AMORTIZATION WORKSHEET (STRAIGHT-LINE METHOD) NECESSARY BOND FACTS: Face Amount: 1st Interest Pmt Date: Annual OR Semi-Annual? Issue Price/Amount/%: ?? Bond Term: Discount/Prem Amount: Stated Interest Rate: Issue Date: Market Interest Rate: Interest Pmt *Use Face Amt & Stated Rate Interest Exp *Us v & Market Rate Dischtrem Amgrtization New Carrying Value (CV) Discn Prem Bal Journal Entries Date Account Name Debit Сredit On January 1, 2017, when the current market interest rate was 8%, Waveland Corporation issued $120,000,000, 5-year bonds. The bonds pay an annual coupon rate of 10%. Interest payments are made semi-annually on June 30th and December 31st REQUIRED: a. At what price should this bond offering sell? b. Create a table showing the amortized premium or discount the first three years of the bonds. c. Prepare the journal entry on the date of the bond issuance. d. Prepare the first two semiannual interest payment journal entries. BOND AMORTIZATION WORKSHEET (STRAIGHT-LINE METHOD) NECESSARY BOND FACTS: Face Amount: 1st Interest Pmt Date: Annual OR Semi-Annual? Issue Price/Amount/%: ?? Bond Term: Discount/Prem Amount: Stated Interest Rate: Issue Date: Market Interest Rate: Interest Pmt *Use Face Amt & Stated Rate Interest Exp *Us v & Market Rate Dischtrem Amgrtization New Carrying Value (CV) Discn Prem Bal Journal Entries Date Account Name Debit Сredit
Expert Answer:
Answer rating: 100% (QA)
Workings Cash Flow Factor Present Value 120000000 par maturity value 068058 81669600 6000000 inte... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2017, Dionne Ltd. signed a 10-year non-cancelable lease agreement to lease a storage building from Seline Inc. Seline is in the business of leasing/selling property. Collectibility of...
-
On January 1, 2018, LMU, Inc. issued $250,000 of 6%, 10 year bonds for $216,025, yielding an effective interest rate of 8%. Semiannual interest is payable on June 30 and December 31 each year. The...
-
2x 8. Solve the initial value problem y' - (22) y = 0, y(0) = 3
-
Our thoughts return to Ambrose and his nuts and berries. Ambroses utility function is U(x1, x2) = 4x1 + x2, where x1 is his consumption of nuts and x2 is his consumption of berries. (a) Let us find...
-
Analysis of a sample of polyacrylonitrile (see Table 16-3) shows that there are six lengths of chains, with the number of chains of each length shown in the table below. Determine (a) The weight...
-
(a) Draw resonance structures for the carbocation that could be formed from (E)-2-butenyl trifluoromethanesulfonate. (b) One of the resonance structures for this carbocation should be a more...
-
If the RANS equation (17.5) is subtracted from the unaveraged \(\mathrm{N}-\mathrm{S}\) equation (17.1), we obtain the following equation for the perturbation velocity:...
-
On January 1 Borman Company, a lessee, entered into three non-cancelable leases for brand new equipment, Lease J, Lease K, and Lease L. None of the three leases transfer ownership of the equipment to...
-
A company is projected to generate free cash flows of $429 million next year, growing at a 4.7% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.6%. The...
-
BookWeb, Inc., sells books and software over the Internet. A recent article in a trade journal has caught the attention of management because the company has experienced soaring inventory handling...
-
High-frequency transformer (HFT) operates using the same principles as standard transformers. The main difference is that, as its name implies, it operates at higher frequencies, whereas most power...
-
Q1 - Analyse 3 types of buyer-supplier relationships and identify which you belive to be the most beneficial in achieving long term goals between buyers and suppliers .Substantiate your answer . Q2 -...
-
Describe 3-5 ways your proposed project may help your company. These should include one or more of the following business case areas: a) Revenue Growth (e.g., from new customers, markets, innovative...
-
Describe your learnings from your reading " Unraveled: The Life and Death of a Garment by Maxine Bedat" . What are your main take aways? What surprised you most? What does it mean for companies and...
-
1. Introduction: provide a brief description of the topic(s) you select. Topics Chosen : (Operations and supply chain management),( strategy and sustainability), (manufacturing process), & (strategic...
-
Procurement departments use many different metrics to measure their own performance. One is cost savings over time. Another is the number of suppliers, where less is apparently better. But it would...
-
Verify Stokes' theorem when F = (3z, 2x, 3y) and S is the outwards-oriented part of the inverted paraboloid 4z 66x22y2 which lies above the curve = [6 marks] C: r (cost, sint, sin t) 0
-
A line l passes through the points with coordinates (0, 5) and (6, 7). a. Find the gradient of the line. b. Find an equation of the line in the form ax + by + c = 0.
-
1. Why is fair value accounting so important to companies such as News Corporation (mentioned in the chapter) that have substantial investments in goodwill recorded on their balance sheets? 2. News...
-
In January 2017, Harold Corporation acquired 20% of Otis Company's outstanding common stock for $400,000. This investment gave Harold the ability to exercise significant influence over Otis. The book...
-
Coyote Co. is building a waste landfill in the desert between Arizona and California. Coyote estimates that this landfill will be in operation for five years, will cost $250 million to build, and...
-
Consider an experiment that selects a cell phone camera and records the recycle time of a flash (the time taken to ready the camera for another flash). The possible values for this time depend on the...
-
Suppose that the recycle times of two cameras are recorded. The extension of the positive real line \(R\) is to take the sample space to be the positive quadrant of the plane \[ S=R^{+} \times R^{+}...
-
As in Example 2.1, camera recycle times might use the sample space \(S=R^{+}\), the set of positive real numbers. Let \[ E_{1}=\{x \mid 10 \leq x <12\} \quad \text { and } \quad E_{2}=\{x \mid 11 0\}...
Study smarter with the SolutionInn App