Q: determine the current market value of the bond.
A: Bond valuation is a method of finding the fair value of the bond. Fair value means the present…
Q: Explain Recording Bonds at Issuance.
A: Bond at issuance is recorded at: Par Premium Discount
Q: Compare the two commonly used methods of determining interest on bonds.
A:
Q: characteristics of bonds -terminology of bonds -types of bonds?
A: BONDS Meaning- Bonds are investment securities where an investor invest money in a company or to a…
Q: What are the four main issuers of bonds?
A: Answer: A bond is nothing but an interest bearing security that obliges the issuer to pay a…
Q: When a bond is issued, what is its present value?
A: The present value of the bond is the total of the present value of the bond's interest payments that…
Q: What is the stated rate for a bond?
A:
Q: How is the present value of a bond calculated?
A:
Q: How is the price of a bond (or bond issuance) determined?
A: solution concept coupon rate of bond The coupon rate of the bond is the stated…
Q: What are callable and puttable bonds? Explain in single sentence please.
A: Callable bonds are the bonds which can be redeemed anytime at the option of the issuer before its…
Q: xplain the calculation to find value of the bonds
A: The value of bond is the present value of coupon payment and present value of par value of bond…
Q: Which are the main types of bonds issued by two major issuers namely?
A: Corporate bonds It is a bond issued by the company for raising the capital and sold to an investor.…
Q: Which of the following items are basic elements that affect the value of bond? I. The required…
A: The value of the bond depends on factors such as par value, coupon rate, interest frequency, yield…
Q: Describe the characteristics of traditional bonds and contemporary bonds
A: Traditional bonds can be categorized in to two types, Secured and unsecured bonds. Bonds which have…
Q: What is a bond payable?
A: Long-Term LiabilitiesLong-term liabilities are the obligations of the business that need not be paid…
Q: What are the four main types of bonds?
A: The four main types of bonds are discussed as follows: Fixed-Rate bonds – In this type of bond, the…
Q: Define capital gains yield (on a bond)
A: The formula to compute capital gain yield as follows:
Q: List the four main types of bonds in order from least risky to most risky. Describe who issues these…
A: Meaning of a bond: A bond is a form of loan in which a lender is lending the borrower a certain sum…
Q: . Distinguish between the following values relative to bonds payable: a. Maturity value. b.…
A: Definition: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies,…
Q: Where and how are bonds proceeds recorded? Bond interest and bond principal payments?
A: Bond is a financial instrument issued by the company to raise funds for the growth and development…
Q: What is outstanding bond?
A: Bond: It can be defined as the loan given to a business or any other organization by the investor…
Q: What are the different types of Bonds?
A: A corporate bond is a type of debt security that is issued by a firm and sold to investors. The…
Q: The bonds are “first mortgage” bonds, explain the statement. What does this means?
A:
Q: Explain payment-in-kind (PIK) bonds
A: A financial instrument that does not affect the ownership of the common shareholders or management…
Q: Explain the meaning of each of the following terms as they relate to a bond issue: (a) convertible…
A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money…
Q: What is the difference between serial bonds, term bonds, callable bonds, and convertible bonds.
A: Bonds are securities which are issued for specified period and bear fixed interest payable on the…
Q: Explain the three key variables that distinguish bonds,compare the advantages and disadvantages of…
A: Bonds: A bond is an instrument of the obligation of the bond establishment to the holders. it's a…
Q: Define a floating-rate bond and give examples
A: Floating-rate bond is a bond pays a variable interest rate. The interest rate is depends on a…
Q: a. Define what the operational cycle is. b. Indicate in your own words the meaning of the following…
A: Operatinal Cycle: The operating cycle definition defines how many days it takes for a firm to…
Q: What are redeemable and irredeemable bonds? Explain in single sentence please
A: Redeemable bonds are the bonds which are redeemed after fixed no. of years.
Q: What is the difference between callable and putable bonds?
A: Bonds are debt instruments issued by a company that borrows from its lenders. They are issued at a…
Q: describe the characteristics and terminology of bonds payable
A: Definition of Bonds payable: Bonds are issued by Government , corporations etc.
Q: Describe the nature of bonds and indicate the accounting for bond issuances.
A: Capital market: A capital market is a place where the shares and bonds are traded. This helps a…
Q: What are the methods of determining interest on bonds?
A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing…
Q: d1 where the bonds wer
A: A bond refers to the form of a financial instrument which is used while investing in mutual funds or…
Q: Determine the selling price of the bonds
A: The selling price of the bonds is the present value of the cash payments to be made during the life…
Q: B. Analyse any FIVE features of Bonds with suitable examples.
A: Bonds are corporate debt units issued by corporations that are securitized as tradeable assets.…
Q: What are two important characteristics that determine the issuance price of a bond?
A: Following are the two characteristics that determine the issuance price of a bond: The riskiness of…
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- 4. What is the carrying value of the bonds at the end of the second period (third number)? Premium 57,913.01 Carrying value (bonds) 432,913.01 Face Rate Market Rate Semiannual payments a. b. Cash Payment C. d. e. 14% 10% 0 or 1 2 or 3 4 or 5 6 or 7 8 or 9 Interest Expense Today Period #1 26,250.00 Period #2 26,250.00 Carrying value at end of second period (third number) ___________?__ 2. Disc. or Prem. Amort. 21,645.65 21,415.43 Disc. or Prem. 4,604.35 4,834.57 57,913.01 53,308.66 48,474.10 Face Value 375,000.00 375,000.00 375,000.00 Carrying Value 432,913.01 428,308.66 423,474.10Would you please help me understand how you got 16 for semiannual periods (number of period)? Bond premium amortised = Total bond premium ÷ Number of period = $407,830 ÷16 semiannual periods = $25,489 (Rounded to the nearest dollars).Calculate the value of each bond and discuss whether it sells at par, discount, or premium. (Annual interest rate) O A. Bond Bond Value A B C O B. Bond A B C O C. Bond A B с O D. Bond A B C $1,149.39 Discount $1,000.00 Par $85.60 Premium Bond Value Sells at par/discount/premium Bond Value $1,149.39 Premium $1,000.00 Par $85.60 Discount Sells at par/discount/premium Bond Value Sells at par/discount/premium $1,149.39 Premium $1,000.00 Par $85.60 Premium Sells at par/discount/premium $1,049.39 Premium $1,100.00 Premium $85.60 Discount Bond Par value Coupon interest Years to rate maturity JA B IC $1000 14% $1000 18% $100 10% 120 16 18 Required return 12% 8% 13%
- What is assumed the be the face value aka par value aka principal aka loan amount of a bond? It's also assumed to be a bond's FV. 10% $0 $100 $1,000Consider the following figure which shows the relationship between a three-year bond's price (vertical axis) and the passage of time (measured in years - horizontal axis). $106.000 $104.000 $102.000 $100.000 $98.000 $96.000 $94.000 594.846 0.00 S96.688 598.567 0.50 Bond Price as Time Passes $100.4 1 $102.433 $96.433 1.00 $98.307 $100.217 1.50 $102.13 58148 2.00 Which of the following statements are consistent with the figure above? $104.148 $100.055 $106.000 $101.99 250 $103.980 This pattern of prices is consistent with a bond whose yield to maturity is below the band's coupon rate. This bond pays a coupon of $8. This bond pays coupons on an annual basis. None of the other statements are correct. 1003) Answer the below questions for bonds A and B. Bond A 8% 8% 2$100.00 $100.00 $100.00 $104.055 CouponYield to maturity Maturity (years) ParPrice Bond B 9% 8% (a) Calculate the actual price of the bonds for a 100-basis-point (1% annual) increase in interest rates. (b) Using (modified) duration, estimate the price of the bonds for a 100-basis- 5 point (1% annual) increase in interest rates.(c) Explain why your answers in parts (a) and (b) differ.
- Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 percent, the future value of the bond (the amount the bond pays in one year) is? a. P1,560.00 b. P1,540.00 c. P1,440.00 d. 1,442.31Calculate the selling price of the following 5-year bond issue: e. # bonds Bond rate of interest Interest payable Market rate of interest Bond maturity (face) value 600 5.8% semi-annually 6.0% $1,000bond contract rate=7% semi-anual bond par=$10,000 bond market =6% semi-annual bond life =10 years 1) find the selling price of this bond 2) will it be sold at a discount or premium 3) do the journal entry for the issuance 4) calculate the discount/premium authorization per period (use the sightline method ) 5 )do the entry for the payment of cash interest period 6) do the entry for the amortization of the discount /premium per period 7) find total interest expense per period 8) show the balance sheet presentation of the bond after two periods have elapsed
- Q4. A long term bond with a face value of $10,000 has a bond interest rate of 6% per year pay: quarterly. What are the amount of the interest payments? (a) $160 (b) $150 (c) $170 (d) $155 (e) your answer (... ......)Using Table 2 (PV$1), find the Present Value (PV) Factor used to calculate the PV of the lump sum bond payment for this bond: Bond #1 Face Value $100 Stated Rate = 8% Market Rate = 6% Time to Maturity = 5-Years Quarterly PaymentsAssume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 $100,000 issued at 94.50 b. $100,000 issued at 103 50 c. $100,000 issued at 94.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.