After working this problem out what is the figure to be placed in the cash book: (ix) A long-term bond purchased by Varsity Supplies & Things two (2) years ago, with a face value of $450,000 will mature on January 15, 2023. To meet the financial obligations of the business, management has decided to liquidate the investment upon maturity. On that date semi-annual interest computed at a rate of 8⅓% per annum is also expected to be collected
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After working this problem out what is the figure to be placed in the
| (ix) A long-term bond purchased by Varsity Supplies & Things two (2) years ago, with a face | ||||
| value of $450,000 will mature on January 15, 2023. To meet the financial obligations of the | ||||
| business, management has decided to liquidate the investment upon maturity. On that date | ||||
| semi-annual interest computed at a rate of 8⅓% per annum is also expected to be collected |
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- On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = I/Y = PMT = FV = (b) The present value of the note was (c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method.On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = I/Y = PMT = $ FV = $On January 1, 2022, Ace Company finished landscaping services and accepted in exchange a 10% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable at December 31 each year. Notes with similar risk have a market rate of interest of 5%. Set financial calculator to zero decimal place. Required: (a) Determine the value of the following: N = Answer 1 Question 4 I/Y = Answer 2 Question 4 PMT = $Answer 3 Question 4 FV = $Answer 4 Question 4 (b) The present value of the note was $Answer 5 Question 4 (c) Prepare a Schedule of Note Discount/Premium Amortization for Ace Company under the effective interest method. Ace Company Schedule of Note Discount/Premium Amortization Effective Interest Method Date Cash Interest Amortized Amount Carrying Value of Note Jan 1, 2022 $Answer 6 Question 4 Dec 31, 2022 $Answer 7 Question 4 $Answer 8 Question 4 $Answer 9 Question 4 Answer 10 Question 4 Dec 31,…
- On January 1, 2022, Ace Company finished landscaping services and accepted in exchange a 10% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable at December 31 each year. Notes with similar risk have a market rate of interest of 5%. Set financial calculator to zero decimal place. Required: (a) Determine the value of the following: N = _________________ I/Y = ___________________ PMT = ______________________ FV = $______________ (b) The present value of the note was $________________ (c) Prepare a Schedule of Note Discount/Premium Amortization for Ace Company under the effective interest method.On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = Answer 1 Question 3 I/Y = Answer 2 Question 3 PMT = $Answer 3 Question 3 FV = $Answer 4 Question 3 (b) The present value of the note was $Answer 5 Question 3 (c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method. Slack Company Schedule of Note Discount/Premium Amortization Effective Interest Method Date Cash Interest Amortized Amount Carrying Value of Note Jan 1, 2022 $Answer 6 Question 3 Dec 31, 2022 $Answer 7 Question 3 $Answer 8 Question 3 $Answer 9 Question 3 Answer 10 Question 3 Dec 31,…XYZ funds purchased a bank bill (face value=1 million) on 10th June 2020. The bill will mature in 60 days and the yield is 6.95%. After holding the bill for 40 days, the funds sold the bill at a yield of 6.5%. a) Calculate the profit through buy and sell of this bank bill. b) Work out the simple annual interest rate and effective annual interest rate earned by XYZ.
- On September 1, 2023, Cullumber Ltd. purchased equipment for $43,200 by signing a two-year note payable with a face value of $43,200 due on September 1, 2025. The going rate of interest for this level of risk was 7%. The company has a December 31 year end. (The tables in this problem are to be used as a reference for this problem.) Click here to view Table A.2 - PRESENT VALUE OF 1- (PRESENT VALUE OF A SINGLE SUM) Click here to view Table A.4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 (a) Your Answer Calculate the cost of the equipment, where necessary using any of the three methods (tables, financial calculator, or Excel), assuming the note is as follows: (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) 1. 2. 3. 1. 2. Correct Answer (Used) 3. An 7% interest-bearing note, with interest due each September 1. A 2% interest-bearing note, with interest due each September 1. A non-interest-bearing note. An 7% interest-bearing note A…Are the following assets rate-sensitive within a six-month time frame? Provide an explanation for each. a) Fed Funds sold (daily repricing) b) Two-year Treasury bond with semiannual coupon payments c) 4-year fully amortized car loan with $350 monthly payments including both principal and interest (for the first six months, principal payments total $448) d) Commercial loan priced at the bank's prime rate plus 2%The following information applies to this question: Johnson Corporation plans to obtain financing with a $1,000,000 bond issue that has a term of 10 years. Payments wilI be made semi-annually. if the bond (payment) rate is stated at 7%, and the bonds call for semi-annual payments, what is the amount of those payments? O a. $350,000 O b. $70,000 OC. $35,000 d. $700,000
- Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement. It can either make immediate payment of $2,673,000, or it can make annual payments of $347,100 for 15 years, each payment due on the last day of the year. Click here to view factor tables. Which method of payment do you recommend, assuming an expected effective interest rate of 10% during the future period? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Present value of annual payments Recommended payment method Annual Payments 44ABC Inc. plans to issue $500,000 face value bonds with a stated interest rate of 12% and market interest rate of 10%. They will mature in 10 years. Interest will be paid semiannually. At the date of issuance, compute the present value (bond issue price) of the future cash flows. Following are appropriate factors from tables: Table % / n Present Value of $1 Present Value of ordinary annuity of $1 10%/10 .38554 6.14457 12%/10 .32197 5.65022 5%/20 .37689 12.46221 6%/20 .31180 11.46992 Required Computation:On December 31, 2019, Panda Bank recorded an investment of P5,000,000 in a loan granted to a client. The loan has a 10% effective interest rate payable annually every December 31. The principal is due in full at maturity on December 31, 2022. Unfortunately, the borrower is experiencing significant financial difficulty and will have difficult time in making full payment. The bank projected that the entire principal will be paid at maturity and 4% interest or P200,000 will be paid annually on December 31 of the next three years. There is no accrued interest on December 31, 2019. The PV of 1 at 10% for three periods is 0.75, and the PV of an ordinary annuity of 1 at 10% for three period is 2.49. What is the loan impairment loss for 2019? A. P600,000 B. P752,000 C. P250,000 D. P748,000