A firm issued a 16%,$1,000 bond issued and dated Jan.1/2000 maturing Jan.1,2011 paying interest each June 30 and December 31,and yielding 14%.One bond is used for simplicity.
Required:
(a)Determine the price of the bond
(b)All Year 2000 entries and balance sheet presentations for the bond after each interest date in Year
A. Show the interest method and straight-line methods in parallel fashion. Balance sheet disclosure Jan. 1/00 (both methods) 77.42 = $1,105.94(.07) 5.30 = $105.94/20
Balance sheet disclosure June 30/00 77.24 = $1,103.36(.07) 5.30 = $105.94/20
Balance sheet disclosure Dec. 31/00

Question

A firm issued a 16%,$1,000 bond issued and dated Jan.1/2000 maturing Jan.1,2011 paying interest each June 30 and December 31,and yielding 14%.One bond is used for simplicity.
Required:
(a)Determine the price of the bond
(b)All Year 2000 entries and balance sheet presentations for the bond after each interest date in Year
A. Show the interest method and straight-line methods in parallel fashion.   Balance sheet disclosure Jan. 1/00 (both methods)   77.42 = $1,105.94(.07) 5.30 = $105.94/20
Balance sheet disclosure June 30/00   77.24 = $1,103.36(.07) 5.30 = $105.94/20
Balance sheet disclosure Dec. 31/00

Quizplus · Accepted Answer

The Answer of A firm issued a 16%,$1,000 bond issued and dated Jan.1/2000 maturing Jan.1,2011 paying interest each June 30 and December 31,and yielding 14%.One bond is used for simplicity.
Required:
(a)Determine the price of the bond
(b)All Year 2000 entries and balance sheet presentations for the bond after each interest date in Year
A. Show the interest method and straight-line methods in parallel fashion.   Balance sheet disclosure Jan. 1/00 (both methods)   77.42 = $1,105.94(.07) 5.30 = $105.94/20
Balance sheet disclosure June 30/00   77.24 = $1,103.36(.07) 5.30 = $105.94/20
Balance sheet disclosure Dec. 31/00

A Firm Issued a 16%,$1,000 Bond Issued and Dated Jan