Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Zombie Industries issues $400,000 face value, 8.5 percent coupon, fifteen year bonds on January 1, 2008. Interest is paid yearly on December 31.

Make journal entry to record interest expense and the interest payment on these bonds on December 31, 2008, using the effective interest rate method if the market rate of interest on January 1, 2008 is 10 percent?

[A] What is the book value of these bonds on January 1, 2009 under the effective interest rate method if the market rate of interest on January 1, 2008 is 10 percent?

[B] What is the market value of these bonds on January 1, 2009 if the market rate of interest on January 1, 2008 is 10 percent and the market rate of interest on January 1, 2009 has increased to 12 percent?

[C] Find the total interest expense recorded on these bonds over the fifteen years if the market rate of interest on January 1, 2008 is 10 percent?

[D] At what price [where par = 100 percent] would these bonds be issued, if the market rate of interest on January 1, 2008 is 10 percent?

[E] Prepare the journal entry to record the sale of the bonds on January 1, 2008 if the market rate of interest on January 1, 2008 is ten percent?

[F] At what price [where par = 100 percent] would these bonds have been issued, if the market rate of interest on January 1, 2008 had been 7 percent rather than 10 percent?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916967

Have any Question? 


Related Questions in Basic Finance

1 why does the inverse relationship between the inflation

1. Why does the inverse relationship between the inflation rate and the unemployment rate on the Phillips curve hold only in the short run? In the long run, what happens when the actual inflation rate differs from the ex ...

1 describe the actions you will take ie increasing

1. Describe the actions you will take (i.e., increasing deductions or reducing gross income) to achieve tax savings in the present year. 2. Detail the means by which you will reduce your tax liability in the future (i.e. ...

Research a potential employerassume that your favorite

Research a potential employer Assume that your favorite company has invited you to interview. To prepare for the interview, research the company by reviewing its website, reading news stories, and exploring websites such ...

The following appears in the 2000 10-k of international

The following appears in the 2000 10-K of International Business Machines: The company employs a number of strategies to manage these risks, including the use of derivative financial instruments. Derivatives involve the ...

In formulating your key concept exercise consider the

In formulating your Key Concept Exercise, consider the following questions: What are the benefits of just-in-time (JIT) techniques? What types of organisations use JIT techniques? Should things change if they are running ...

If us-based mncs are concerned with how shareholders react

If US-based MNCs are concerned with how shareholders react to changes in consolidated earnings, but prefer not to hedge their translation exposure, how might they attempt to reduce shareholder reaction to a decline in co ...

1 what is net worth what role does net worth play in

1. What is net worth? What role does net worth play in lenders' attempts to reduce adverse selection problems? 2. What is relationship banking? How do banks and borrowers benefit from relationship banking? 3. What is the ...

Complete the given assignment-two population meansa tomato

Complete the given assignment:- Two Population Means A tomato farmer with a very large farm of approximately 2200 acres had heard about a new type of rather expensive fertilizer which would supposedly significantly incre ...

A company exports 37000 products to chile nbspunder an

A company exports 37,000 products to Chile  under an import license that expires in five years. In Chile, the products are sold for the Chile peso equivalent of $45. Direct shipping costs in the United States and indirec ...

1 compare and contrast the transport principles of economy

1. Compare and contrast the transport principles of economy of scale and economy of distance. Illustrate how they combine to create efficient transportation. 2. Describe the five modes of transportation, identifying the ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro