Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bingbing at 96-1/2. Required: Assuming when the bond is offered to Bing-bing, it has a remaining life 4 years. Bingbing required rate of return for her bond investment is 18% p.a.: a. Compute for the value of each bond? How much is the total value of the bonds offered? b. Based on the offered price, what is the bond approximate yield to maturity? c. Would you recommend to Bing-bing to buy the bonds? Why?

Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bingbing at 96-1/2. Required: Assuming when the bond is offered to Bing-bing, it has a remaining life 4 years. Bingbing required rate of return for her bond investment is 18% p.a.: a. Compute for the value of each bond? How much is the total value of the bonds offered? b. Based on the offered price, what is the bond approximate yield to maturity? c. Would you recommend to Bing-bing to buy the bonds? Why?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Smile Corp. Issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every four (4) months. On October 1, Hapi purchased 20 bonds at par. On May 31, she sold 8 bonds to Honey at 105-3/4. Again on September 30, Hapi sold another 6 bonds to Sweet at 96-1/2. Required: 1. Assuming when the bond is offered to Honey, it as a remaining life of 6 years. Honey wants a 15% p.a.rate of return on her bond investment: a. Compute for the value of each bond? How much is the total value of the bonds offered? b. Based on the offered price, what is the bond exact yield to maturity? c. Would you recommend to Honey to buy the bonds? Why?
Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bing- bing at 96-1/2. Required: Assuming when the bond is offered to Pinky, it has a remaining life of 6 years. Pinky wants a 15% p.a. rate if return on her bond investment: Compute for the value of each bond? How much is the total value of the bonds offered to Pinky? Based on the offered price, what is the bond exact yield to maturity? Would you recommend to Pinky to buy the bonds? Why?
Your company sells $41,000 of one-year, 12% bonds for an issue price of $39,500. The journal entry to record this transaction will include a credit to Bonds Payable in the amount of: Multiple Choice $39,500. $41,000. $44,420. $45,920.
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Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bingbing at 96-1/2. Required: 1. Assuming when the bond is offered to Pinky, it has a remaining life of 6 years. Pinky wants a 15% p.a. rate if return on her bond investment: a. Compute for the value of each bond? How much is the total value of the bonds offeredto Pinky? b. Based on the offered price, what is the bond exact yield to maturity? c. Would you recommend to Pinky to buy the bonds? Why?
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2.Max's Company invests in the bonds issued by CarmCorp. On 1/1/20 Max buys $60,000 of 5% bonds that pay interest on 1/1. They mature in 10 years and yield 6%. Max pays $55,584. On 12/31/20, the fair value of the bonds is $60,800. Assuming the bonds are classified as "Trading", prepare the journal entries for 1/1/20, 12/31/20, and 1/1/21. You may omit (leave out) the closing entries.