Reference no: EM131304032
On July 1, 2008, Justin Corporation issued $20 million of 8%, twenty-year bonds. Interest on the bonds is paid semiannually on December 31 and June 30 of each year, and the bonds were issued when the market interest rate was 9%.
Required:
1. Compute the issue price of the bonds on July 1, 2008.
2. Prepare the journal entries to record all interest expense and all cash interest payments for 2011.
3. On January 1, 2013, the company exercised a call provision in the debenture agreement and redeemed 60% of the bonds at 104% of par. Prepare the journal entry the company made to record this partial redemption.
4. The market yield for the bonds on January 1, 2013, was 6%. What is the economic gain or loss that Justin realized on the repurchase of its debt?
5. Prepare the journal entry (entries) that Justin would make during 2028 with respect to the bonds.
Does gold have intrinsic value
: In what sense does a bubble in the price of an asset result from a "set of self-confirming beliefs"?
|
Create a mission statement for the new division
: Create a mission statement for the new division. Create a vision statement that clearly demonstrates what you want your business to become in the future.
|
What is the current stock price
: One year from today, investors anticipate that Groningen Distillers Inc. stock will pay a dividend of $3.25 per share. After that, investors believe that the dividend will grow at 20% per year for three years before settling down to a long-run growth..
|
What is the role of the development of new products
: What is the total product that Starbucks markets?- What is the role of the development of new products in Starbucks' success?
|
Bonds were issued when the market interest rate
: On July 1, 2008, Justin Corporation issued $20 million of 8%, twenty-year bonds. Interest on the bonds is paid semiannually on December 31 and June 30 of each year, and the bonds were issued when the market interest rate was 9%. Compute the issue pri..
|
What was the peak of the federal funds rate
: What was the peak of the federal funds rate? What has been the lowest rate for the federal funds rate?
|
What process for starting nonprofit organization in new york
: If you wanted to start a nonprofit organization, do you need a lawyer? What is the process for starting a nonprofit organization in New York?
|
Why are pricing decisions important to an organization
: Why are pricing decisions important to an organization?- Compare and contrast price and nonprice competition. Describe the conditions under which each form works best.
|
Preferred stock rate of return
: Preferred Stock Rate of Return What is the required rate of return on a preferred stock with a $50 par value, a stated dividend of 10% of par, and a current market price of (a) $58, (b) $89, (c) $101, and (d) $148 (assume the market is in equilibrium..
|