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Mmahajan, Can you answer the following four questions in the attachment? Please show all work this time. Thank you. Question 1 On 2010 September 30,
Mmahajan, Can you answer the following four questions in the attachment? Please show all work this time. Thank you.
Question 1 On 2010 September 30, Domingo's Construction Company issued USD 120,000 face value of 12 percent, 10-year bonds dated 2010 August 31, at 100, plus accrued interest. Interest is paid semiannually on February 28 and August 31. Domingo's accounting year ends on December 31. Prepare journal entries to record the issuance of these bonds, the accrual of interest at year-end, and the payment of the first interest coupon. Question 2 A recent annual report of Wal-Mart Corporation showed the following amounts as of the dates indicated: Earnings before interest (and taxes) (millions) Interest expense (millions) Year Ended January 31 2001 2000 1999 $11,583 $10,162 $8,008 1,467 1,079 838 Calculate the times interest earned ratio for each year and comment on the results. Question 3 Storall Company issued USD 200,000 face value of 16 percent, 20year junk bonds on 2010 July 1. The bonds are dated 2010 July 1, call for semiannual interest payments on July 1 and January 1, and were issued to yield 12 percent (6 percent per period). a. Compute the amount received for the bonds. b. Prepare an amortization schedule similar to that in Exhibit 45. Enter data in the schedule for only the first two interest periods. Use the interest method. Prepare journal entries to record issuance of the bonds, the first six months' interest expense on the bonds, and the adjustment needed on 2011 May 31, assuming the company's fiscal year ends on that date. c. Question 4 Ecological Water Filtration, Inc., is going to issue USD 400,000 face value of 10 percent, 15year bonds. The bonds are dated 2009 June 30, call for semiannual interest payments, and mature on 2024 June 30. a. Compute the price investors should offer if they seek a yield of 8 percent on these bonds. Also, compute the first six months' interest, assuming the bonds are issued at this price. Use the interest method and calculate all amounts to the nearest dollar. b. Repeat part (a), assuming investors seek a yield of 12 percentStep by Step Solution
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