Question
Brooks Inc. has issued three types of debt on January 1, 2014, the start of the companys fiscal year. (a) $5 million, 20-year, 8% secured
Brooks Inc. has issued three types of debt on January 1, 2014, the start of the companys fiscal year.
(a) $5 million, 20-year, 8% secured subordinated bonds, interest payable annually. Bonds were priced to yield 10%.
(b) $8 million par of 20-year, zero-coupon bonds at a price to yield 12% per year.
(c) $10 million, 20-year, 10% bonds secured by the factory building interest payable semi-annually to yield 8%.
Prepare a schedule that identifies the following items for each bond: (1) maturity value, (2) number of interest periods over life of bond, (3) stated rate per each interest period, (4) effective interest rate per each interest period, (5) payment amount per period, and (6) present value of bonds at date of issue.
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