Compute the price of the bond

Assignment Help Accounting Basics
Reference no: EM13297842

BOND PROBLEM: Red Corp issues $1,000,000, 8% five year bonds with interest paid semiannually. The current market rate of interest is 10%.

  • Required:

- Compute the price of the bond
- Compute the discount/premium
- Record the issuance of the bonds
- Record the first interest payment including straight line amortization.
- After 2 years, the company redeems the bonds at $1,040,000. Record the transaction.

 

Reference no: EM13297842

Questions Cloud

Define the total pressure in the container at equilibrium : At a certain temperature, the Kp for the decompositon of H2S is 0.800. H2S(g0 H2(g)+S(g) Initally, only H2S is present at a pressure of 0.239 atm in a closed container. What is the total pressure in the container at equilibrium
Calculate the kinetic energy of the particle : A particle undergoes uniform circular motion of radius 19.1 ?m in a uniform magnetic field. What is the kinetic energy of the particle
Effective competitive intelligence program : Most US companies generally agree they need an effective competitive intelligence (CI) program. What are four objectives of such an effective program? Discuss their dimensions and correlate their effectiveness on advancing the firm’s strategy.
How to calculate the concentrations of pcl5(g) : A 0.291 mol sample of PCl5(g) is injected into an empty 4.35 L reaction vessel held at 250 °C. Calculate the concentrations of PCl5(g) and PCl3(g) at equilibrium.
Compute the price of the bond : Compute the price of the bond
Find the normal sress and deformation in the wire : a 10.0 inch long 10-guage wire of yellow brass (E=105 GPa) is subjected to an axial tensile force of 400 lbs. Find the normal sress and deformation in the wire. A 10-guage wire has a diameter of 2.588 mm.
Would your advice depend on the maturity of individual bonds : You anticipate an increase in interest rates in the near future. How would you advise her? Would your advice depend on the maturity of individual bonds?
Calculate the mass of the meter stick : A meter stick balances horizontally on a knife-edge at the 50.0 cm mark. What is the mass of the meter stick
Determine the maximum number of large trucks and buses : The traffic stream consists of cars, buses, and large trucks (no recreational vechicles). A weekday directional peak-hour volume of 1800 vehicles (familar users) is observed, with 700 arriving in the most congested 15 min period.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Preparing monthly financial statements

Somerville Corp. purchases office supplies once a month and prepares monthly financial statements. The asset account Office Supplies on Hand has a balance of $1,450 on May 1. Purchases of supplies during May amount to $1,100. Supplies on hand at M..

  Journal entries of garg employment agency

On December 31, the adjusted trial balance of Garg Employment Agency shows the following selected data. Prepare the closing entries for the temporary accounts at December 31.

  Implied annual interest rate-inherent in credit terms

Farewell company purchased merchandise with an invoice price of $2000 and credit terms of 2/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit terms?

  What is bens basis in the real estate after beths death

Beth, who died in January 2012, was survived by her husband, Ben. Beth's federal gross estate was equal to $6,000,000 on the date of her death.

  Personal pravacy and confidentiality in banking

Discuss the conflict between the need for personal pravacy and confidentiality in banking transactions and the need for government to curtail money laundering activities

  Cost information relating to single product organisation

The following production and total cost information relates to a single product organisation for the last three months: Month Production Total cost units £ 1 1,200 66,600 2 1,900 58,200 3 1,400 68,200

  Section of statement of cash flows

The Lawrence Company sold fixed assets for cash of $8,000. The assets had a book value of $5,000. How should this be reported in the investing activities section of a statement of cash flows?

  What will be the adjusting entry to accrue wages expense

Cindi's Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $900 a day in wages. What..

  What is mikes recognized gain or loss

What is Mike's recognized gain or loss on the sale of the stock, and what is her basis in the 30 shares purchased 25 days earlier?

  What is the maximum permitted coverdell education

what is the maximum permitted coverdell education savings account contribution that benjamin and ester can make in 2011?

  Price earnings ratio on common stock

Orchard"s net income for the year ended December 31 was $50,000. The yearly preferred dividend was declared. No capital stock transactions occurred. What was the price earnings ratio on Orchard"s common stock at December 31?

  Divdends received deduction

A corporation's taxable income before the divdends received deduction (DRD) is $40,000. Included in this amount is dividend income of $60,000 from another corporation in which the taxpayer owns 90 percent of its stock outstanding.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd