On January 1, 2021, Water Wonderland issues $20 million of 8% bonds, due in ten years, with interest payable semiannually on June 30 and December 31 each year.1. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.2. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.3. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
What will be an ideal response?
1. Premium. The issue price is $21,421,240 (rounded).
2. Face amount. The issue price is $20,000,000.
3. Discount. The issue price is $18,699,206 (rounded).
You might also like to view...
Which of the following statements regarding the activities of Forman Corp is true?
a. Revenues decrease Forman's stockholders' equity. b. Expenses increase Forman's stockholders' equity. c. Expenses decrease Forman's stockholders' equity. d. None of these answer choices is correct.
Responsibility accounting authorizes managers to take control of and be held accountable for the revenues and expenses in their budgets
Indicate whether the statement is true or false
Ron and Gail, owners of Fun-Spot, strive to provide new offerings and entertainment options for their visitors. This type of strategy can be best described as ________
A) market penetration B) market development C) product development D) niche marketing E) diversification
An unfortunate by-product of working from home is that Victoria's work can blend into her personal space and time. In order to minimize stress, she should most likely:
A) maintain a sales call report to ensure long-term job satisfaction B) ignore minor and major problems to avoid being overwhelmed C) hold a realistic outlook about task management duties D) consider working fewer hours or accept a demotion E) establish strict working hours in a home office