Calculate the issue price of a bond (ROUND ANSWERS TO TWO DECIMAL POINTS) On March 1,...
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Calculate the issue price of a bond (ROUND ANSWERS TO TWO DECIMAL POINTS) On March 1, 2022 Moreli Inc. issued five-year bonds with a face value of $600,000 and a stated coupon interest rate of 4% payable on September 1 and March 1. The bonds were sold to yield a market rate of 6%. Present value table factors are: Present value of 1 for 5 periods at 6% .74726 Present value of 1 for 5 periods at 4% .82193 Future value of 1 for 5 periods at 6% Future value of 1 for 5 periods at 4% Present value of 1 for 10 periods at 3% Present value of 1 for 10 periods at 2% 1.33823 1.21665 .74409 .82035 Future value of 1 for 10 periods at 3% 1.34392 Future value of 1 for 10 periods at 2% 1.21899 Present value of an ordinary annuity of 1 for 5 periods at 6% 4.21236 Present value of an ordinary annuity of 1 for 5 periods at 4% Future value of an ordinary annuity of 1 for 5 periods at 6% Future value of an ordinary annuity of 1 for 5 periods at 4% Present value of an ordinary annuity of 1 for 10 periods at 3% Present value of an ordinary annuity of 1 for 10 periods at 2% Future value of an ordinary annuity of 1 for 10 periods at 3% 4.45182 5.63709 5.41632 8.53020 8.98259 11.46338 Future value of an ordinary annuity of 1 for 10 periods at 2% 10.94972 ulate the issue price of the bonds. You will not receive credit unless you show your work us 1. SHOW YOUR WORK to Calculate the issue price of the bonds. You will not receive credit unless you show your work using the factors from the above listing. 2. PREPARE the amortization table (with column titles) for the bond. 3. PREPARE the journal entry for issuance for the bond on March 1, 2022. And the first interest payment on September 1, 2022. 4. Extra Credit: Assume only Annual Financial statements are issued at Calendar year end December 31, 2022 and record and other journal entries needed for fiscal year 2022. Calculate the issue price of a bond (ROUND ANSWERS TO TWO DECIMAL POINTS) On March 1, 2022 Moreli Inc. issued five-year bonds with a face value of $600,000 and a stated coupon interest rate of 4% payable on September 1 and March 1. The bonds were sold to yield a market rate of 6%. Present value table factors are: Present value of 1 for 5 periods at 6% .74726 Present value of 1 for 5 periods at 4% .82193 Future value of 1 for 5 periods at 6% Future value of 1 for 5 periods at 4% Present value of 1 for 10 periods at 3% Present value of 1 for 10 periods at 2% 1.33823 1.21665 .74409 .82035 Future value of 1 for 10 periods at 3% 1.34392 Future value of 1 for 10 periods at 2% 1.21899 Present value of an ordinary annuity of 1 for 5 periods at 6% 4.21236 Present value of an ordinary annuity of 1 for 5 periods at 4% Future value of an ordinary annuity of 1 for 5 periods at 6% Future value of an ordinary annuity of 1 for 5 periods at 4% Present value of an ordinary annuity of 1 for 10 periods at 3% Present value of an ordinary annuity of 1 for 10 periods at 2% Future value of an ordinary annuity of 1 for 10 periods at 3% 4.45182 5.63709 5.41632 8.53020 8.98259 11.46338 Future value of an ordinary annuity of 1 for 10 periods at 2% 10.94972 ulate the issue price of the bonds. You will not receive credit unless you show your work us 1. SHOW YOUR WORK to Calculate the issue price of the bonds. You will not receive credit unless you show your work using the factors from the above listing. 2. PREPARE the amortization table (with column titles) for the bond. 3. PREPARE the journal entry for issuance for the bond on March 1, 2022. And the first interest payment on September 1, 2022. 4. Extra Credit: Assume only Annual Financial statements are issued at Calendar year end December 31, 2022 and record and other journal entries needed for fiscal year 2022.
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To calculate the issue price of the bonds we can use the present value formula Issue price Coupon pa... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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