1. A Ford bond carries a coupon rate of 4%, payable semi-annually and has 20 years until maturity. It has a yield to maturity (YTM /yield rate) of 10%. a. Would this bond sell above or below $1,000? Explain. b. What will happen to the price if the bond yield rises to 12%? c. If Ford significantly increased the amount of debt on its balance sheet, what would likely happen to the price of the bond? Explain. d. If Ford defaulted on an interest payment, what would likely happen to the coupon rate? Explain. e. Give two specific business reasons specific to Ford that could cause the yield rate to decrease on the Ford bond f. As a bond trader, what is your strategy when purchasing Ford bonds-what are you 'betting' on? g. The yield on Ford bonds decreased 0.5% the day before they were to be sold to the market. Would the CFO of Ford be happy or sad? Explain. 2. Uselessstuff. com sells various electronic items online. The company also sells gift cards that can be used to purchase items from the Uselessstuff.com website. These cards cannot be redeemed for cash. At the beginning of 2015, Uselessstuff. com had a balance of $85,000 in its "gift card liability" account. During 2015, it sold $250,000 in gift cards and $70,000 worth of gift cards were redeemed for merchandise that cost Uselessstuff.com $35,000. It is estimated that 1.5% of the "gift card liability" at the end of 2015 won't be redeemed by customers. a. Prepare the journal entries to record to sale of gift cards and redemption of gift cards in 2015 b. Record the yearend adjusting entry to record the gift cards that won't be redeemed. c. What is the 2015 yearend balance in the "gift card liability account after the above adjusting entry? d. How would the sale of gift cards affect the current ratio