White & Decker Corporation's 2024 financial statements included the following information in the long-term debt disclosure note: ($ in millions) 2024 $ 321 zero-coupon subordinated debentures, due 2039: The disclosure note stated the debenture bonds were issued late in 2019 and have a maturity value of $630 million. The maturity value indicates the amount that White & Decker will pay bondholders in 2039. Each individual bond has a maturity value (face amount) of $1,130. Zero-coupon bonds pay no cash interest during the term to maturity. The company is "accreting" (gradually increasing) the issue price to maturity value using the bonds' effective interest rate computed on an annual basis. Required: 1. Determine the effective interest rate on the bonds. 2. Determine the issue price in late 2019 of a single, $1,130 maturity-value bond. Note: For all requirements, round your answers in millions to 2 decimal places. For example, $555.55 million should be entered as 555.55. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) 1. Effective interest rate 2. Issue price % million

White & Decker Corporation's 2024 financial statements included the following information in the long-term debt disclosure note: ($ in millions) 2024 $ 321 zero-coupon subordinated debentures, due 2039: The disclosure note stated the debenture bonds were issued late in 2019 and have a maturity value of $630 million. The maturity value indicates the amount that White & Decker will pay bondholders in 2039. Each individual bond has a maturity value (face amount) of $1,130. Zero-coupon bonds pay no cash interest during the term to maturity. The company is "accreting" (gradually increasing) the issue price to maturity value using the bonds' effective interest rate computed on an annual basis. Required: 1. Determine the effective interest rate on the bonds. 2. Determine the issue price in late 2019 of a single, $1,130 maturity-value bond. Note: For all requirements, round your answers in millions to 2 decimal places. For example, $555.55 million should be entered as 555.55. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) 1. Effective interest rate 2. Issue price % million

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 9P

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White & Decker Corporation's 2024 financial statements included the following information in the long-term debt disclosure note: ($ in millions) Zero-coupon subordinated debentures, due 2039: 2024 $ 401 The disclosure note stated the debenture bonds were issued late in 2019 and have a maturity value of $590 million. The maturity value indicates the amount that White & Decker will pay bondholders in 2039. Each individual bond has a maturity value (face amount) of $1,090. Zero-coupon bonds pay no cash interest during the term to maturity. The company is "accreting" (gradually increasing) the issue price to maturity value using the bonds' effective interest rate computed on an annual basis. Required: 1. Determine the effective interest rate on the bonds. 2. Determine the issue price in late 2019 of a single, $1,090 maturity-value bond. Note: For all requirements, round your answers in millions to 2 decimal places. For example, $555.55 million should be entered as 555.55. (FV of $1, PV of…
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Help Save White & Decker Corporation's 2019 financial statements included the following information in the long-term debt disclosure note: ($ in millions) 2019 Zero-coupon subordinated debentures, due 2033: $360 The disclosure note stated the debenture bonds were issued late in 2013 and have a maturity value of $610 million. The maturity value indicates the amount that White & Decker will pay bondholders in 2033. Each individual bond has a maturity value (face amount) of $1,110. Zero-coupon bonds pay no cash interest during the term to maturity. The company is "accreting" (gradually increasing) the issue price to maturity value using the bonds' effective interest rate computed on an annual basis. (FV of $1, PV of $1, EVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the effective interest rate on the bonds. 2. Determine the issue price in late 2013 of a single, $1,110 maturity-value bond. (For all requirements,…
On June 30, 2024, Single Computers issued 8% stated rate bonds with a face amount of $100 million. The bonds mature on June 30, 2039 (15 years). The market rate of Interest for similar bond issues was 5% (2.5% semiannual rate). Interest is paid semiannually (4.0%) on June 30 and December 31, beginning on December 31, 2024. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1 EVA of $1. PVA of $1 EVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on June 30, 2024 2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the price of the bonds on June 30, 2024. Note: Round percentage answers to one decimal place. Round your final answers to nearest whole dollar amount, not in millions. Table values are based on: Cash Flow Interest Principal Price of bonds n= Amount Present Value Required Required 2>…