financial accounting tophat chp 12b
Cainas Cookies issues a $1,000,000, 5 year, 12% bond when the market rate of interest is 8%. Interest is paid semi-annually. To solve for the issue price of the bond, you need to solve for:
$1,000,000 (PV ss n = 10 I = 4%) + $60,000 (PV ann n = 10 I = 4%)
Little Greek issues a 500,000, 5 year, 8% bond on 1/1/19. Interest is paid quarterly, and the bond is issued when the market rate of interest is 12%. How do I solve for the issue price of the bond?
$10,000 (PV ann n = 20 I = 3%) + $500,000 (PV ss n = 20 I = 3%)
Little Greek issues a 500,000, 5 year, 8% bond on 1/1/19. Interest is paid quarterly, and the bond is issued when the market rate of interest is 12%. The issue price was $415,770. What is the interest expense recorded on 4/1/19?
$12,473.10
A company issues a $1,000,000, 6%, 10 year bond when the market rate was 4%, and the bond pays interest semi-annually. The cash interest paid each period will be:
$30,000
A company issues a $1,000,000, 6%, 10 year bond when the market rate was 8%, and the bond pays interest annually. The cash interest payment recorded in the first payment period will be:
$60,000 each payment period
Cainas Cookies issues a $100,000, 6%, 10 year bond when the market rate is 8%. The bond pays interest on 6/30 and 12/31 of each year. The bond will be sold at:
A discount
A company issues a $1,000,000, 6%, 10 year bond when the market rate was 4%. The bond will be issued:
At a premium