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Chapter 9 Homework Submit your answers in CANVAS before it is due USE THE PV Factor Tables located in Module 8 in Canvas) or the TI BAll Plus Financial Calculator to answer the following questions relating to the time value of money. Use the following to answer questions 1-3 (Round answers to the nearest dollar) BA Corp issues 4.5%, 5-year bonds with a total face amount of $100,000. The market interest rate for bonds of similar risk and maturity is 4.6% Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET. 1. $_ How much will be paid in interest each interest payment? _(rounded to nearest dollar). What is the present value of the interest payments? 2. S 3. $ (rounded to nearest dollar). What is the issue price of the bond? Use the following to answer questions 4-7 (Round answers to the nearest dollar) TR issues 5.3%, 5-year bonds with a total face amount of $500,000. The market interest rate for bonds of similar risk and maturity is 5.2% Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET (Input your answers after you've completed the entire problem). 4. S t rounded to nearest dollar). What is the issue price of the bond? 5. $ (rounded to nearest dollar). When the company records the first interest payment, how much will the company record for interest expense? (rounded to nearest dollar). What is the bond ability carrying amount) after the first interest 6. $._ payment? 7. $ (rounded to nearest dollar). When the company records the second interest payment, how much will the company record for interest expense? Use the following to answer questions 8 - 10 (Round answers to the nearest dollar) BZ Corp issues 5%, 10-year bonds with a total face amount of $1,000,000. The market interest rate for bonds of similar risk and maturity is 5%. Interest is paid semiannually. 8. $ _ What is the issue price of the bond? Chapter 9 Spring 2020 Page 9-9
