Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(b) On January 1, 2020, Sarasota Corporation purchased 333 of the $1,000 face value, 8%, 10-year bonds of Walters Inc. The bonds mature on January

image text in transcribed
image text in transcribed
image text in transcribed
(b) On January 1, 2020, Sarasota Corporation purchased 333 of the $1,000 face value, 8%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2030, and pay interest annually beginning January 1, 2021. Sarasota purchased the bonds to yield 11% How much did Sarasota pay for the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Sarasota must pay for the bonds $ eTextbook and Media Save for Later Attempts: unlimited Submit Answer (c Sarasota Corporation bought a new machine and agreed to pay for it in equal annual installments of $5,280 at the end of each of the next 10 years. Assuming that a prevailing interest rate of 8% applies to this contract, how much should Sarasota record as the cost of the machine? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o decimal places, e.g. 458,581.) Cost of the machine to be recorded $ (d) Sarasota Corporation purchased a special tractor on December 31, 2020. The purchase agreement stipulated that Sarasota should pay $20,180 at the time of purchase and $5,020 at the end of each of the next 8 years. The tractor should be recorded on December 31, 2020, at what amount, assuming an appropriate interest rate of 12%? (Round factor values to 5 decimal places, eg. 1.25124 and final answer to 0 decimal places, c.8. 458,581.) Cost of tractor to be recorded $ eTextbook and Media Save for Later Attempts: unlimited Submit Answer le) Sarasota Corporation wants to withdraw $113,110 (including principal) from an investment fund at the end of each year for 9 years. What should be the required initial investment at the beginning of the first year if the fund earns 11%? (Round factor values to 5 decimal places, c.9. 1.25124 and final answer to decimal places, es 458,581) Required initial investment $ eTextbook and Media Save for Later Attempts: unlimited Submit Answer MacBook Pro Periods 1 2 3 NNNN ONO 10 1.010 1.020 1.030 1.041 1.051 1.062 1.083 1.105 1.127 1.220 1.270 TABLE 1 - FUTURE VALUE (AMOUNT) OF $1 24 35 49 55 65 85 105 125 165 1.020 1.030 1.040 1.050 1.060 1.080 1.100 1.120 1,160 1.040 1.061 1.082 1.103 1.124 1.166 1.210 1.254 1.366 1.061 1.093 1.125 1.158 1.191 1.260 1.331 1.405 1.561 1.082 1.126 1.170 1.216 1.262 1.360 1.464 1.574 1.811 1.104 1.159 1.217 1.276 1.338 1.469 1.611 1.762 2.100 1.126 1.194 1.265 1.340 1.419 1.587 1.772 1.974 2.436 1.172 1.267 1.369 1.477 1.594 1.851 2.144 2.476 3.278 1.229 1.344 1.480 1.629 1.791 2.159 2.594 3.106 4.411 1.268 1.426 1.601 1.796 2.012 2.518 3.138 3.896 5.936 1.486 1.806 2.191 2.653 3.207 4.661 6.728 9.646 19.461 1.608 2.033 2.563 3.225 4.049 6.341 9.850 15.179 35.236 6 8 10 12 20 24 Periods 1 2 3 5 6 8 10 12 20 24 TABLE 2 - PRESENT VALUE OF $1 nl 21 30 45 50 64 8 100 12 161 . 9902 .9804 9709 9615 9524 .9434 .9259 .9093 8929 .8621 .9803 .9612 9426 . 9246 .9070 .8900 .8573 .8265 .7972 .7432 .9706 9423 9151 .8890 .8638 .8396 ..7938 .7513 .7118 .6407 9610 .9239 .8885 .8548 .8227 .7921 .7350 6830 .6355 .5523 -9515 .9057 .8626 .8219 .7835 7473 .6806 . 6209 25674 .4761 9423 .8880 .8375 .7903 .7462 .7050 .6302 .5645 .5066 .4104 9235 .8535 .7894 7307 .6768 .6274 .5403 .4665 4039 .3050 9053 .8204 .7441 .6756 .6139 .5584 4632 .3855 3220 .2267 -8875 .7885 7014 .6246 .5568 .4970 3971 .3186 .2569 . 1685 8195 .6730 .5537 .4564 .3769 .3118 .2146 .1486 1037 .0514 .7876 .6217 .4919 3901 .3101 .2470 . 1577 1015 .0659 0284 TABLE 3 - FUTURE VALUE (AMOUNT) OF AN ORDINARY ANNUITY OF $1 1 23 34 46 58 65 84 101 12 165 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.160 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.506 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 5.067 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.877 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.977 8.286 6.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 17.519 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 21.321 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 30.850 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 115.380 26.973 30.422 34.426 39.083 44.502 50.816 66.765 88.497 118.155 213.978 Periods 1 2 3 4 5 6 8 10 12 20 24 Periods 1 2 3 4 TABLE 4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF $1 11 25 35 45 50 60 81 105 121 9901 .9804 .9709 29615 .9524 .9434 9259 9091 .8929 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 9.471 6.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.294 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 21.243 18.914 16.936 15.247 13.799 12.550 10.529 8.985 3.784 6 B 10 12 20 24 168 .8621 1.605 2.246 2.798 3.274 3.685 4.344 4.933 5. 197 5.929 6.073 SONO

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel

17th edition

1119503663, 1119571480, 1-119-50368-2, 111950368X, 978-1119503668

More Books

Students also viewed these Accounting questions