O pts Alltech Corporation on January 1, 2025, issues $100,000 of 5% bonds due in 5...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
O pts Alltech Corporation on January 1, 2025, issues $100,000 of 5% bonds due in 5 years with interest payable annually at year-end ($100,000 x .05 = $5,000). The current market rate of interest for bonds of similar risk is 6%. Present value of 1 for 5 periods at 5% Present value of 1 for 5 periods at 6% Future value of 1 for 5 periods at 5% Future value of 1 for 5 periods at 6% .78353 .74726 1.27628 1.33823 Present value of an ordinary annuity of 1 for 5 periods at 5% Present value of an ordinary annuity of 1 for 5 periods at 6% Future value of an ordinary annuity of 1 for 5 periods at 5% Future value of an ordinary annuity of 1 for 5 periods at 6% 3.79079 3.60478 5.52563 5.63709 1) What is the bond issue price? Show your calculations. 2) Prepare the amortization table for this bond. 3) Prepare the journal entry for the bond issues and subsequent payments over the life of the bond? (Amortization table journal entries): O pts Alltech Corporation on January 1, 2025, issues $100,000 of 5% bonds due in 5 years with interest payable annually at year-end ($100,000 x .05 = $5,000). The current market rate of interest for bonds of similar risk is 6%. Present value of 1 for 5 periods at 5% Present value of 1 for 5 periods at 6% Future value of 1 for 5 periods at 5% Future value of 1 for 5 periods at 6% .78353 .74726 1.27628 1.33823 Present value of an ordinary annuity of 1 for 5 periods at 5% Present value of an ordinary annuity of 1 for 5 periods at 6% Future value of an ordinary annuity of 1 for 5 periods at 5% Future value of an ordinary annuity of 1 for 5 periods at 6% 3.79079 3.60478 5.52563 5.63709 1) What is the bond issue price? Show your calculations. 2) Prepare the amortization table for this bond. 3) Prepare the journal entry for the bond issues and subsequent payments over the life of the bond? (Amortization table journal entries):
Expert Answer:
Answer rating: 100% (QA)
To calculate the bond issue price we can use the present value of the bonds future cash flows The ca... View the full answer
Related Book For
Intermediate Accounting 2014 FASB Update
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these finance questions
-
Paul Torrance suggested that creative thinking consists of fluency, flexibility, originality and elaboration. Explain how you would cultivate these processes in the classroom.
-
Compute the cost of not taking the following cash discounts. (Use a 360-day year. Do not round intermediate calculations. Input your final answers as a percent rounded to 2 decimal places.) Cost of...
-
when developing a strategy for product distribution, which is not commonly consider? A . How exclusive should the distribution network be ? B . How intensive the distribution network be ?
-
In 2020/21 Ella had taxable income (after deducting the personal allowance) of 52,000, all of which represented savings income. She paid 1,600 as a Gift Aid donation to the NSPCC (a registered...
-
Refer to Case Study 21.1, in which women were randomly assigned to receive either a placebo or calcium and severity of premenstrual syndrome (PMS) symptoms was measured. a. What are the null and...
-
The Green Gnome Company manufactures lawn and garden concrete and resin statues. It uses a standard costing system for its products. Managers and production personnel are paid bonuses based on...
-
Mookie Betts gets a home run in his next plate appearance. Use the following table of the top 15 players by number of plate appearances (PA) in the 2019 Major League Baseball season to assign...
-
Stan's Wholesale buys canned tomatoes from canneries and sells them to retail markets. During August 2012, Stan's inventory records showed the following: Even though it requires more computational...
-
The function f(x) = 2x339x2240x + 1 has one local minimum and one local maximum. Use a graph of the function to estimate these local extrema. This function has a local minimum at x = with output...
-
Mode . The demand and supply functions for a good are P = 100-0.5Q and P = 10+ 0.5Q, respectively. (a) Calculate the equilibrium price and quantity; confirm your answer graph- ically. (b) Calculate...
-
Discuss Examples of window of opportunities that enterpreneurs can grab?
-
Klikstop's new "Mark II" hearing aid includes the latest noise canceling technology. But the new Mark II seems set to compete with the company's own "Mark I" hearing aid. Klikstop sells the old Mark...
-
Why kitchen organization is important? Give three examples of most important functions of kitchen in an organization? and explain Is the size and area of the kitchen important in terms of operations?...
-
Laughter is emotion or state that a person can go through to feel happiness. The brain cannot identify if the person is laughing for real or not and so even if they are fake laughing the brain still...
-
Show examples of organizational environment and culture affecting the internal conditions of the work setting. Show the strengths and weaknesses in each organizational structure? Also, how does an...
-
Presentation graphics: Eliminate the need of the legal team to hire graphic artists. Are available through courthouse IT personnel only. Require specialized training to use. None of the above.
-
Maria Castigliani is head of the purchasing department of Ambrosiana Merceti, a medium-sized construction company. One morning she walked into the office and said, The main problem in this office is...
-
Suppose that noncollege-graduates earn a salary of $25,000 per year in your hometown, and that salary will never change. If you go to college for four years, foregoing four years worth of that...
-
In 2002, Donnin Company had a break-even point of \($350,000\) based on a selling price of \($7\) per unit and fixed costs of \($140,000\). In 2003, the selling price and the variable cost per unit...
-
Ewing Company estimates that variable costs will be 50% of sales, and fixed costs will total \($800,000\). The selling price of the product is $4. Instructions (a) Prepare a CVP graph, assuming...
Study smarter with the SolutionInn App