12/31/2024 7,000 6,110 890 100,943 A) Leasing may offer protection against the risk of declining asset values. 169) Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. 170) Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. 06/30/2022 7,000 7,855 855 197,225 Determine the indefinite integrals. 12/31/2023 7,000 7,961 961 200,000 12/31/2022 300,000 351,337 51,337 8,834,770 06/30/2021 $ 250,000 $ 220,000 $ 30,000 5,470,000 C) $4,250,000. Explanation: )), Unit Operations of Chemical Engineering (Warren L. McCabe; Julian C. Smith; Peter Harriott), Auditing and Assurance Concepts and Applications (Darell Joe O. Asuncion, Mark Alyson B. Ngina, Raymund Francis A. Escala), The Law on Obligations and Contracts (Hector S. De Leon; Hector M. Jr De Leon), The Tragedy of American Diplomacy (William Appleman Williams), Principios de Anatomia E Fisiologia (12a. a. dependent on rates stated on the bond Record keeping is simple because all bondholders get the same deal. Explanation: ($345,639/$8,640,967) 2 payments per year = 8%. 1. A) Total assets of $527,666.30, and total liabilities of $325,000.00. A) 4%. 06/30/2023 7,000 7,925 925 199,039 i = 8%/2 semi-annual periods = 4% These risks include rising interest rates, call risk, and the possibility of corporate bankruptcy. D) 25.0 times. Why a Bond Sells at a Discount. Answer: C A) $10,000,000. A) 3%. A) $104,265. **Table 4: Since investors buy stocks to make money, diluting the value of their investments is highly undesirable. A) Carrying value and interest expense increase. Use (PV of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. B) 3.5%. Annual payments of $20,000 begin on December 31, 2021. B) 6.9%. It helps to explain why companies often issue bonds when they need to finance corporate activities. $3,000^ 8.31661** = $ 24,950 (rounded) D) $2,000,000. D) $1,000, Answer: A 70) Which of the following is not a reason why some companies lease rather than buy? The bond terms often define the amount that must be paid to call the bond. between two counterparties to the current gross market value of B. Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value Answer: A Total assets (end of year) 60,000 B) Sold for the $500,000 face amount plus $10,000 of accrued interest. D) $200,000. 175) The balance sheet of Montezuma reports total assets of $900,000 and $1,100,000 at the beginning and end of the year, respectively. market. ($ in millions) C) Bonds are more likely to involve borrowing from a single lender. C) Bondholders must hold their bonds until maturity to receive cash for their investment. D) $244,333. In a press release, the central bank has provided the date for . ^$50,000 10% 1/2 year = $2,500. Examples of supranational entities that issue bonds are the World Bank or the European Investment Bank. C) Return on assets is calculated as net income divided by the ending balance for total assets. These bonds are tied to a specific project, such as an infrastructure build. ($ in millions) 06/30/2023 7,000 7,925 925 199,039 THA issued the bonds: expected life of the band or when appropriate, a shorter period to the net carrying amount Explanation: $125,000 6% 1/12 = $625.00 interest expense c. Not dependent on the rate of the bond. The bonds have an interest of 16 percent. C) April 30, 2024 If interest rates decrease, the company can redeem the outstanding bonds and reissue the debt at a lower rate. 105) Which of the following is true for bonds issued at a discount? You can learn more about the standards we follow in producing accurate, unbiased content in our. C) $8,000,000. 74) Before signing a lease, a company reports total assets of $500,000 and total liabilities of $300,000. 92) A $500,000 bond issue sold for $510,000. Explanation: FV ($500,000); PMT ($15,000); I (3.5%); N (20 periods) = PV ($464,469). A) 11.7%. (Hint: Be sure to provide the annual rate rather than the six-month rate.) 104) The true interest rate used by investors to value a bond is called the: The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. (Use a financial calculator or Excel) B) Is contained in the balance sheet. 149) Tomkin Library System issues $5 million in bonds on January 1, 2021 that pay interest semi-annually on June 30 and December 31. D) Bonds 1 and 2. 12/31/2023 7,000 6,160 840 101,833 B) Cash payment rate. That reduces the cost of capital. James Bond (L-R) Timothy Dalton, Roger Moore, Daniel Craig, Sean Connery, Pierce Brosnan and George Lazenby Everett Collection. 12/31/2021 7,000 7,822 822 196,370 C) Is a schedule that reflects the changes in the carrying value of the bond over its term to maturity. Use (PV of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value They sold their house in Maplewood, New Jersey, and moved near Seattle. Total assets (beginning of year) 900,000 *Table 2: A) Issuing installment notes. c. debenture bonds What is the issue price of the bond (rounded to nearest whole dollar)? 185) Selected financial data for Channel Co. is provided below: D) The face amount of the bond plus the present value of the periodic interest payments. - Sold at a premium because the s; When bonds sell for more than the maturity value (a premium), the market rate of interest is: a. Explanation: $200,000 5% 1/12 = $833.33 interest expense. 12/31/2021 250,000 218,800 31,200 5,438,800 c. the interest rate that exactly discounts estimated future cash payments through the Faced with bankruptcy, a bondholder can choose to sell their bonds or hold on, anticipating a reorganization. A bond may be issued at a discount for the following reasons: 1. These two types of revenue are accounted for differently. What is the face amount of the bonds? B) A discount. The lease payments are $182.53 per month and have a present value of $6,000. When the bond reaches its maturity date, the company repays the investor. A) Note. C) $64,570. D) All of the other answer choices are correct. 99) Given the information below, which bond(s) will be issued at a discount? C) $214,877. A) 6.0%. Total assets (end of year) 60,000 A few years ago, when I created Libs of TikTok, it was an opportunity to expose the increasing pandemic of the attack on our children's innocence. 12/31/2023 7,000 6,160 840 101,833 A) 3%. A) No gain or loss. The Reserve Bank of India (RBI) has fixed dates for the premature withdrawal of several tranches of sovereign gold bonds (SGB). n = 5 years 2 periods each year = 10 periods Explanation: C) $5,500,000. What gain or loss, if any, would THA record on this date? B) $464,471. A) The final carrying value is not zero in either amortization schedule. B) Interest. Explanation: $250,000/X = 20%, therefore X = ($250,000/20%) = $1,250,000. Answer: D A) The debt to equity ratio measures a company's risk and is calculated as total liabilities divided by stockholders' equity. ^$100,000 6% 1/2 year = $3,000. 58) Babble Co. signs a five-year installment note on January 1, 2021. For companies, the bond market clearly offers many ways to borrow. For a bond issue that sells for more than the bond face amount, the effective interest rate is: Multiple Choice Less than the rate stated on the face of the bond. A ten-year bond pays 11 percent interest on a 1000 face value annually If it currently sells for 1195 what is its approximate yield to maturity? B) Secured only by the "full faith and credit" of the issuing corporation. Total liabilities (end of year) 600,000 Once bonds are issued, the sixth feature appears, which is yield to maturity. i = 5%/2 semi-annual periods = 2.5% X2's accountant has projected the following amortization schedule from issuance until maturity: Answer: C 166) Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. NDTV Q3 profit down 49.7% to Rs 15 cr, revenue down 9.4% to Rs 105.4 cr. b. B) $5,470,000. B) $464,469. Explanation: The initial carrying amount of $5,500,000 is greater than the face amount of $5,000,000. Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value B) Lease payments often are lower than installment payments. n = 5 years 2 periods each year = 10 periods. PMT = $100,000 6% 1/2 year = $3,000. Lease payments of $6,457 are due every three months (10 payments total), beginning on October 1, 2021. need to pursue the investment in order to receive the full amount A) The stated interest rate is greater than the market interest rate. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. A) Less than the interest expense. For any given bond, they all have the same interest rate and maturity date. 100) Given the information below, which bond(s) will be issued at a premium? For a bond issue that sells for more than its face value the market rate of interest is? A) Bonds involve less surrendering of ownership control. 152) Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. i = 12%/2 semi annual periods = 6% B) 3.5%. 118) The carrying value, using the effective interest method, would increase each year: b. decreases the amount of interest expense i = 6%/2 semi-annual periods = 3% A government bond is issued by a government at the federal, state, or local level to raise debt capital. What is the stated annual rate of interest on the bonds? The Wall Street Journal prime rate. D) Increase and decrease stockholders' equity. positions between the same counterparties. The current market rate of interest is 8%. C) $1,000,000 Calling a bond is similar to a mortgage borrower refinancing at a lower rate. C) 1.50. How do I implement a good quality cricket and football turf at a low expense? D) 7%. 186) Selected financial data for Channel Co. is provided below: Intuitively, an investor will be wary of purchasing a bond that would be harder to sell afterward. ($ in millions) 119) When bonds are issued at a discount and the effective interest method is used for amortization, at each subsequent interest payment date, the cash paid is: Market Rate of Return 8 % 10 % 10 % 9 % A) Face rate. Explanation: $7,000/$100,000 = 7%. Explanation: FV ($500,000); PMT ($15,000); I (2.5%); N (20 periods) = PV ($538,973). C) More than the market rate. Explanation: Carrying value, $18 million, less cash paid to retire the bonds of $15 million = $3 million gain. When a bond issue sells for less than its face value, the market rate of interest is: Higher than the stated rate of interest. A) Increases. B. C) $71,906. Sales $ 50,000 The market rate of interest for a bond . 12/31/2021 $ 7,000 $ 6,253 $ 747 103,465 B) $3,000 gain. Generally if a bond is said to be sold at discount if the state . B) Secured and serial. C) Sold at a discount because the stated interest rate was higher than the market rate. C) Carrying value decreases and interest expense increases. B) $58,001. B) 11% Key Features of Bonds. For a bond issue that sells for more than the bond face amount, the effective interest rate is: The rate printed on the face of the bond. C) The stated interest rate and the market interest rate are equal. A) 10.0 times. 12/31/2021 300,000 347,464 47,464 8,734,070 Bond 1 Bond 2 Bond 3 Bond 4 C) A premium. b. A portion of the bond amortization schedule appears below: Supranational entities refer to global entities that are not based in a specific nation. Why did the population expert feel like he was going crazy punchline answer key? c. mortgage bonds Dalton, Roger Moore, Daniel Craig, Sean Connery, Pierce Brosnan and George Lazenby Collection... Of interest is 8 % rate are equal Everett Collection 182.53 per month have... 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