Bonds purchased at a premium
[DOC File]Buying Bonds - bivio
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The call provision generally states that if the bonds are called, the company must pay the bondholders an amount greater than the par value, a call premium. Redeemable bonds give investors the right to sell the bonds back to the corporation at a …
Why buy a bond at a premium? — AccountingTools
Depending on your investment needs, you might consider short-term or long-term bonds, and you might choose between new issues or bonds purchased at a premium or discount on the secondary market. Or you may take advantage of the relative security of buying through mutual funds or unit investment trusts.
[DOC File]Quantitative Problems Chapter 10 - University of Colorado ...
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Retiring bonds under a sinking fund provision is similar to calling bonds under a call provision in the sense that bonds are repurchased by the issuer prior to maturity. b. Under a sinking fund, bonds will be purchased on the open market by the issuer when the bonds are selling at a premium and bonds will be called in for redemption when the ...
[DOC File]Chapter 08 Intercompany Indebtedness - CPA Diary
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Therefore, the discount or premium is amortized over the life of the bonds as an increase or decrease in the amount of interest expense for each period. 9.The stated rate of interest is the rate specified on a bond, whereas the effective rate of interest is the market rate at which the bonds are selling currently.
[DOC File]Practice Problem 2
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Are these two bonds selling at a discount, premium, or par? (c) If the required return on the two bonds rose to 10%, what would the bonds’ prices be? Problem solution for end of chapter and study guide. 1. $924.18. 2. $148.64. 3. (a) Bond A $1,172.92. Bond B $802.07 (b) Bond A is selling at a premium. Bond B is selling at a discount
[DOC File]Godgift
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The bonds were sold at par ($1,000), had a 14 percent coupon, and matured in 30 years, on December 31, 2011. Coupon payments are made semiannually (on June 20 and December 31). a. What was the YTM on January 1, 1982? b. What was the price of the bonds on January 1, 1987, 5 years later, assuming that interest rates had fallen to 12 percent?
[DOC File]CHAPTER 7
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Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on January 1, 2008, for $122,000. Mortar owns 75 percent of Granite's voting common stock. 29. Based on the information given above, what amount of premium on bonds payable will be eliminated in the preparation of the 2008 consolidated financial statements?
[DOCX File]Bonds, Instructor's Manual
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Bonds Payable. Premium on Bonds Payable 257,500 250,000 7,500 2 Jul. 1 Interest Expense. Premium on Bonds Payable. Cash 9,625. 375 10,000 3 Dec. 31 Interest Expense. Premium on Bonds Payable. Interest Payable 9,625. 375 10,000 Semi-annual interest payment = $250,000 x 0.08 x 0.5 = $10,000. The total premium of $7,500 is amortized over 10 years.
[DOC File]Tuesday February 27, 2007 - Iowa State University
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Dakak Company issued bonds with a face value of P4, 000,000 and with a stated interest rate of 10% on Jan. 01, 2008. The interest is payable semiannually on June 30 and December 31. The bonds mature on every December 31 at a rate of P2, 000,000 per year for 2 years. The prevailing rate for the bonds is 8%. The present value of 1 at 4% is as ...
[DOCX File]Chapter 10
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Ex. 17-120—Investment in debt securities at premium. On April 1, 2010, West Co. purchased $160,000 of 6% bonds for $166,300 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2015. Instructions (a) Prepare the journal entry on April 1, 2010.
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