LG D Red Company (4) OCourse Home Aplia: Student Cours -11--5-Inequai Other book

Question

LG D Red Company (4) OCourse Home Aplia: Student Cours -11--5-Inequai Other bookm tywide Company issues bonds with a par value of S85,000 on their stated ssue date. The bonds mature n seven years and pay 10% annual nterest in semiannual payments. On the issue date, the annual market rate for the bonds is g% CableBI. Table 2 aleea and lates)41 Use appropriate factor(s) from the tables provided.) . What is the amount of each semiannual interest payment for these bonds? Semiannual Rate Semiannual cash interest pay Par (maturity) value 85,000x 4,250 2. How many semiannual interest payments will be made on these bonds over their Iife? 14 3. Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium O At a discount At a premium O At par 4. Comput e the price of the bonds as of their issue date (Round intermediate calculations to the nearest dollar amount) Table values are based on: n- Amount Present Value Table Value sh Flow Par (maturity) value Interest (annuity) Price of bonds

Explanation / Answer

Ans)

1) 85000 X 5% = 4250

2) 14

3) At a premium

4)

5) Cash 93938

Premium on bonds payable 8938

Bonds payable 85,000

Table Values are Based on: n = 14 i = 4.0% Cash Flow Table Value Amount Present Value Par (maturity) value 0.577 x $85,000 = 49045 Interest (annuity) 10.563 x $4250 = 44893 Price of bonds $93938

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.