In year B, Haloute Co. issues $100,000 in 10% bonds to yield 12%. Although the bonds...

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In year B, Haloute Co. issues $100,000 in 10% bonds to yield 12%. Although the bonds have a bond date of July 1, year A, and don't mature for 10 years, Haloute Co. repurchases the bonds on 12/31/F, their FYE, incurring $200 in brokerage fees. a. Calculate the net book value of the bonds on 12/31/F. [93357] b. Calculate the market value of the bonds (using the "partial interest" method) on 12/31/F, assuming the bonds are currently priced to yield 14% (don't forget to include accrued interest). [92307] Provide the 12/31/F entry to repurchase and extinguish the bonds. [gain: 5850] c. Repeat b., assuming the market price of the bonds is determined using the "real interest" method. [net book value, including accrued interest: 92238; gain: 5919] d. How would the above answers differ if the bonds were repurchased and held "in treasury," rather than extinguished? [dr "Treasury Bonds"] In year B, Haloute Co. issues $100,000 in 10% bonds to yield 12%. Although the bonds have a bond date of July 1, year A, and don't mature for 10 years, Haloute Co. repurchases the bonds on 12/31/F, their FYE, incurring $200 in brokerage fees. a. Calculate the net book value of the bonds on 12/31/F. [93357] b. Calculate the market value of the bonds (using the "partial interest" method) on 12/31/F, assuming the bonds are currently priced to yield 14% (don't forget to include accrued interest). [92307] Provide the 12/31/F entry to repurchase and extinguish the bonds. [gain: 5850] c. Repeat b., assuming the market price of the bonds is determined using the "real interest" method. [net book value, including accrued interest: 92238; gain: 5919] d. How would the above answers differ if the bonds were repurchased and held "in treasury," rather than extinguished? [dr "Treasury Bonds"]

Answer rating: 100% (QA)

a Net Book Value of the Bonds on 1231F The net book value of the bonds is the carrying value of the bonds on the companys books Net Book Value Face Va... View the full answer