Calculate the issue price of the bonds

Assignment Help Accounting Basics
Reference no: EM13688094

Bond issue price and premium amortization.
On January 1,2015, Piper Co. issued ten-year bonds with a face value of $3,000,000 and a stated interest rate of 10%, payable semiannually of June 30 and December 31. The bonds were sold to yield 12%. Table values are:
Present value of 1 for 10 periods at 10% .386
Present value of 1 for 10 periods at 12% .322
Present value of 1 for 20 periods at 5% .377
Present value of 1 for 20 periods at 6% .312
Present value of annuity for 10 periods at 10% 6.145
Present value of annuity for 10 periods at 12% 5.650
Present value of annuity for 20 periods at 5% 12.462
Present value of annuity for 20 periods at 6% 11.470

(A) Calculate the issue price of the bonds?
(B) Without prejudice to your solution in part (A), assume that the issue price was $2,652,000. Prepare the amortization table for 2015, assuming that amortization is recorded on interest payment dates using the effective-interest method?

Reference no: EM13688094

Questions Cloud

Determine net present value of the investment : The added production would require an increase in working capital in the form of stocks, valued at cost, of £300,000. The tax rate is 20 per cent and the required rate of return is 18 percent. Determine the net present value of the investment, sp..
List the hardware requirements for an information system : List the hardware requirements for an information system.
Elizabeth pharmaceutical produces several medicines : Elizabeth Pharmaceutical produces several medicines.
Determine the prospective price-earnings ratio : Provide an estimate of the value of the company, indicating the proportion of the value accounted for by the company's growth prospects and determine the prospective price-earnings ratio of the company and comment on its anticipated change in value..
Calculate the issue price of the bonds : Calculate the issue price of the bonds?
Analyse the two payment possibilities : The financial advisors of RBM suggests that the cost of funds to evaluate the proposals is eight per cent. Analyse the two payment possibilities and determine which one you would accept as a manager of RBM.
45-day note of harold stone. : 45-day note of Harold Stone.
A result of the sarbanes-oxley act, : As a result of the Sarbanes-Oxley Act, the New York Stock Exchange and the NASDAQ instituted new rules directly affecting a public company's _____________?
Different forms of the efficient markets hypothesis : An investment of £100,000 is expected to produce an annual net cash flow of £20,130 for each of the next ten years. Calculate the NPV of the investment if the required rate of return is 9 percent and Draw a diagram illustrating a straddle, using c..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Greneer company had checks outstanding totaling 10800 on

greneer company had checks outstanding totaling 10800 on its june bank reconciliation. in july greneer company issued

  Design flooring carpet company manufactures carpets fiber

design flooring carpet company manufactures carpets.fiber is placed in process in the spinning department where it is

  Randolph smithfield is a cost analyst with franklin

randolph smithfield is a cost analyst with franklin insurance company. franklin is applying standards to its claims

  In 2011 a company changed from the lifo method of

in 2011 a company changed from the lifo method of accounting for inventory to fifo. the companys 2010 and 2011

  Hardly a day goes by without an article appearing on the

hardly a day goes by without an article appearing on the crises affecting many of our financial institutions in the

  Which of the following is an example of achange in

which of the following is an example of achange in accounting principle?1a change indepreciation methods.2a change in

  Target contribution margin-amount of actual sales

Contribution margin to sales ratio is 84% for the ABC Co. and the breakeven point in sales is Rs. 150,000. The company desires a target net income of Rs. 42,000.

  Explain both usages of the terms debit and credit

The words debit and credit are used in two ways in accounting: ''e.g., to debit an account'' and ''a debit balance.'' Explain both usages of the terms debit and credit.

  You purchase a commercial building and lot for 450000 on

you purchase a commercial building and lot for 450000 on september 2nd 2012. the lot is estimated to be worth 80000

  Defect of the irr method

One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid. Why do you think this is a correct statement?

  Alfred was divorced from sarah old in march 2010 under the

alfred e. old and beulah a. crane each age 42 married on september 7 2011. alfred and beulah will file a joint return

  What is the break-even point

Haywood Company sells a single product with a contribution margin of $5 per unit, fixed costs of $74,400, and sales for the current year of $100,000. What is the break-even point?

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