Question

On January​ 1, 2018, bonds with a face value of $ 115,000 were sold. The bonds...

On January​ 1, 2018, bonds with a face value of $ 115,000 were sold. The bonds mature on January​ 1, 2028. The face interest rate is 6​%. The bonds pay interest semiannually on July 1 and January 1. The market rate of interest is 12​%. What is the market price of the bonds on January​ 1, 2018? The present value of​ $1 for 20 periods at 6​% is 0.312. The present value of an ordinary annuity of​ $1 for 20 periods at 6​% is 11.47. The present value of​ $1 for 20 periods at 3​% is 0.554. The present value of an ordinary annuity of​ $1 for 20 periods at 3​% is 14.878. ​(Round your final answer to the nearest​ dollar.)

A.$118,450

B. $75,452

C. $115,000

D.$ 115,039

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Calculate market price of a bond. On January 1, 2017 Lance Co. issued five-year bonds with...
Calculate market price of a bond. On January 1, 2017 Lance Co. issued five-year bonds with a face value of $1,000,000 and a stated interest rate of 12% payable semiannually on July 1 and January 1. The bonds were sold to yield 10%. Present value table factors are:          Present value of 1 for 5 periods at 10%                                                                      .62092          Present value of 1 for 5 periods at 12%                                                                      .56743          Present value of 1 for 10 periods at 5%                                                                     ...
On January 1, 2017, Concord Corporation issued eight-year bonds with a face value of $6070000 and...
On January 1, 2017, Concord Corporation issued eight-year bonds with a face value of $6070000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 8 periods at 10%          0.467 Present value of 1 for 8 periods at 12%          0.404 Present value of 1 for 16 periods at 5%        0.458 Present value of 1 for 16 periods at 6%        0.394...
On January 1, 2018, Sharp Company issued bonds with a face value of $500,000. The bonds...
On January 1, 2018, Sharp Company issued bonds with a face value of $500,000. The bonds mature in ten years and have a stated rate of 8%. Required: • Determine the selling price of the bonds if the market rate of interest was 10%. • Determine the selling price of the bonds if the market rate of interest was 6%.
On January 1, 2018, Cod Fisheries sold $100,000 (face value) of bonds. The bonds are dated...
On January 1, 2018, Cod Fisheries sold $100,000 (face value) of bonds. The bonds are dated January 1, 2018, and will mature on January 1, 2023. Interest is to be paid annually on January 1. The following amortization schedule was prepared for the first two years of the bond’s life: Date Interest payment Interest expense Amortization Book value of bond 1/1/18 $104,212.37 1/1/19 $ 7,000 $ 6,252.74 $ 747.26 103,465.11 1/1/20 7,000 6,207.91 792.09 102,673.02 Required: What is the coupon...
On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face...
On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face amount of $21.0 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to...
On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face...
On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face amount of $20.8 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to...
On January 1, 2018, Mania Enterprises issued 12% bonds dated January 1, 2018, with a face...
On January 1, 2018, Mania Enterprises issued 12% bonds dated January 1, 2018, with a face amount of $20 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in whole...
On February 1, 2018, Strauss-Lombardi issued 10% bonds, dated February 1, with a face amount of...
On February 1, 2018, Strauss-Lombardi issued 10% bonds, dated February 1, with a face amount of $930,000. The bonds sold for $855,382 and mature on January 31, 2038 (20 years). The market yield for bonds of similar risk and maturity was 11%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardi’s fiscal year ends December 31. Required: 1. to 4. Prepare the journal entry to record their issuance by Strauss-Lombardi on February 1, 2018, interest on July 31,...
On January 1, 2018, Shirley Corporation purchased 12% bonds dated January 1, 2018, with a face...
On January 1, 2018, Shirley Corporation purchased 12% bonds dated January 1, 2018, with a face amount of $19 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 16%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the price of...
Quatro Co. issues bonds dated January 1, 2018, with a par value of $730,000. The bonds’...
Quatro Co. issues bonds dated January 1, 2018, with a par value of $730,000. The bonds’ annual contract rate is 12%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $767,042. 1. What is the amount of the premium on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT