bond lace ue of 1,000,000. The bond can be redeemed, at the option of e corporation, on any coupon date in 2016 or 2017 at par, on my coupon date in 2018 through 2020 for amount 1,200,000, or any coupon date in 2021 through June 15, 2023 at redemption ount 1,300,000. Find the price to yield a minimum nominal annual rate of (i) 10% and (ii) 6 %%. Find the minimum nominal annual yield if the bond is bought for (i) 800,000, (ii) 1,000,000, or (iii) 1,200,000.
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- n A $105,000 bond redeemable at par on October 15, 2028 is purchased on May 9,2017. The bond interest rate (coupon rate) is 8.94% payable semi-annually and the yield (market interest rate) is 2.24% compounded semi-annually. Should this bond sell at a Premium or a Discount? (Premium or Discount) a.) Determine the value of the coupon. b.) Use Excel's COUPNUM function to find the number of coupons left on the bond. c.) Determine the Present Value of the bond, at the last coupon date. Rounded to 2 decimals. d.) Determine the Present Value of the coupons at the last coupon date. Rounded to 2 decimals. e.) What is the purchase price of the bond on the last coupon date? 1.) Use Excel's COUPDAYBS to determine the number of days from the last coupon date to the purchase date g.) Use Excel's COUPDAYS to determine the number of days between coupon dates. h.) Use the ratio of days as 'n' to calculate the purchase price of the bond on the settlement dateA $1000 bond with semi-annual coupons at j2 = 10% payable January 1 and July 1 each year matures on July 1, 2019, for $1050. a) Determine the price on January 1, 2014, to yield j2=1012%j2=1012%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price $ b) Is the bond purchased at a premium or a discount? Premium Discount c) Calculate the entries in the bond schedule on July 1, 2014, and January 1, 2015. (Do not round intermediate calculations. Negative answers should be indicated by a minus sign. Round your answers to 2 decimal places.) Bond InterestPayment Interest on Book Value Book ValueAdjustment Book Value - - -Calculate the purchase price of the $1,000 face value bond using the information given below. (Do not round the intermediate calculations. Round your final answer to 2 decimal places.) Issue date Dec 15, 2013 Maturity date Dec 15, 2043 Purchase date June 15, 2023 Coupon rate (%) Market rate (%) 5.00 6.4 Assume that • Bond interest is paid semiannually. . The bond was originally issued at its face value. Bonds are redeemed at their face value at maturity. • Market rates of return are compounded semiannually. Bond price
- Assume a firm issues a zero-coupon bond on 1/1/2021. The face value is $5,000,000, and the effective rate is 4.1%, compounded annually over the 20 years of the bond i. Make the amortization table ii. Make the journal entry to issue the bonds on 1/1/2021iii. Make the entry to record interest on 12/31/2021 and 12/31/2022 iv. Make the entry to retire the principle of the bonds on 12/31/2040v. For every entry, record the effectsA $1,000 bond that pays interest at j23D6% is redeemable at par on March 1, 2025. Find the purchase price that would have been paid on September 1, 2010 to yield the investor j2=4.8%. Your Answer: AnswerCompany H issues a $20,000,000 bond on January 1, 2020 with a coupon rate of 9%. The present value of the bond is $20,811,010 and the market rate of interest was 8%. The bond has a 5-year life and will make semiannual interest payments and will use the straight line amortization method. A) Is the bond issued at a face value, a discount, or premium? B) What is the amount of the semi-annual interest payments? C) What is the amount that will be recorded to interest expense each time an interest payment is made? D) What is the carrying value of the bond on December 31, 2021?
- On 01st Jan 2017, ABC Company issued A 5-year bond with a principal of $100 000, annual coupons of 5% p.a., and a call provision on 01 Jan 2020 at the price of $96.38. Given that the yield is 6% p.a. on 01st Jan 2020, would the ABC Company exercise the call provision to buy back the bond at $96.38? Explain why.Assume that a bond is issued with the following characteristics: Date of bonds: January 1, 2023; maturity date: Dec. 31, 2027; face value: $200,000; Coupon interest rate: 10 percent paid semiannually; market interest rate: 12 percent; issue price: $185,280; bond discount is amortized using the effective interest method of amortization. What is the amount of bond discount amortization for the June 30, 2023, adjusting entry? A) $559 B) $1,117 C) $10,000 D) $11,117Company I issues a $40,000,000 bond on January 1, 2020 with a coupon rate of 7%. The present value of the bond is $37,282,062 and the market rate of interest was 8%. The bond has a 10-year life and will make semiannual interest payments and will use the straight line amortization method. A) Is the bond issued at a face value, a discount, or premium? B) What is the amount of the semi-annual interest payments? C) What is the amount that will be recorded to interest expense each time an interest payment is made? D) What is the carrying value of the bond on December 31, 2021?
- An investor holds a Ford bond with a face value of $5000, a coupon rate of 7.5%, and semiannual payments that matures on 01/15/2029. How much will the investor receive on 01/15/20292 A. $5.000.00 OB. $2.503.75 OC. $5,375.00 OD. $5,187.50← The Airfoil Aircraft Company has issued 5% convertible bonds that mature October 1, 2029. Suppose the bonds are issued October 1, 2021, and pay interest each April 1 and October 1. (Click the icon to view the bond data.) Read the requirements. Requirement 1. Assume the bonds are issued at a price of 93.4. Using the straight-line method of amortization for bond discount: a. Calculate interest expense on bonds payable for each semiannual interest payment period. Use two decimal places. (Round intermediary and final calculations to the nearest cent.) The total interest expense each interest period if the bonds are issued at 93.4 isCaiculate the purchase price of the $1,000 face value bond using the information given below. (Do not round the intermediate calculations. Round your final answer to 2 decimal places.) Issue date Dec 15, 1991 Maturity date Dec 15, 2026 Purchase date ১une 15, 2013 Coupon rate (XY 5.50 Market rate (X). 7,4 Assume that • Bond interest is paid semiannually. • The bond was originally issued at its face value. • Bonds are redeemed at their face value at maturity • Market rates of return are compounded semiannually Bond price