Question
On June 30, 2016, Singleton Computers issued 7% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2031
On June 30, 2016, Singleton Computers issued 7% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2031 (15 years). The market rate of interest for similar bond issues was 6% (3.0% semiannual rate). Interest is paid semiannually (3.5%) on June 30 and December 31, beginning on December 31, 2016. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) |
Required: | |
1. | Determine the price of the bonds on June 30, 2016. |
Table values are based on: n = ? i = ? Cash flow Amount Present Value Interest ? ? Principal ? ? Price of bonds $ ?
2. Calcualte the interest expense Singleton repots in 2016 for these bonds using the effective interest method. Period End Cash interest paid Bond interest expnese Premium Amortization CarryingValue 06/30/2016 ? 12/31/2016 ? ? |
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