On September 6, Irene Westing purchased one bond of Mick Corporation at 91.75%. The bond pays 5.25% interest on June 1 and December 1. The stockbroker told Irene that she would have to pay the accrued interest and the market price of the bond and a $4 brokerage fee. What was the total purchase price for Irene? Assume a 360-day year (each month is 30 days) in calculating the accrued interest. (Hint: Final cost = Cost of bond + Accrued interest + Brokerage fee. Calculate time for accrued interest.) (Round your answer to the nearest cent.) Answer is complete but not entirely correct. Total purchase price $ 991.00

On September 6, Irene Westing purchased one bond of Mick Corporation at 91.75%. The bond pays 5.25% interest on June 1 and December 1. The stockbroker told Irene that she would have to pay the accrued interest and the market price of the bond and a $4 brokerage fee. What was the total purchase price for Irene? Assume a 360-day year (each month is 30 days) in calculating the accrued interest. (Hint: Final cost = Cost of bond + Accrued interest + Brokerage fee. Calculate time for accrued interest.) (Round your answer to the nearest cent.) Answer is complete but not entirely correct. Total purchase price $ 991.00

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On September 6, Irene Westing purchased one bond of Mick Corporation at 96.00%. The bond pays 9.75% interest on June 1 and December 1. The stockbroker told Irene that she would have to pay the accrued interest and the market price of the bond and a $5 brokerage fee. What was the total purchase price for Irene? Assume a 360-day year (each month is 30 days) in calculating the accrued interest. (Hint: Final cost = Cost of bond + Accrued interest + Brokerage fee. Calculate time for accrued interest.) (Round your answer to the nearest cent.)
Please give me the detailed process Rejean purchased a 20-year 6 percent real return bond for $15 000 and the CPI has increased by 1.5 percent in the first year. What interest payment will Rejean receive in the second year?
On December 31, 2021, Danny purchased $23,000 of newly issued bonds of Howard Corporation for $19,045. The bonds are dated December 31, 2021. The bonds are 9%, 10-year bonds paying interest semiannually on June 30 and December 31. The bonds are priced to yield 12% compounded semiannually. Read the requirement. Requirement a. What is the amount of the original issue discount? Start by completing the bond amortization table for the first year. (Round all amounts to the nearest dollar.) Year Interest Received December 31, 2021 June 30, 2022 December 31, 2022 Amortization of Original Issue Discount Taxpayers Basis Interest Income for the Bond The amount of the original issue discount is Requirement b. For the first semiannual period, what is the amount of the original issue discount Danny must recognize as ordinary income? (Round the amount to the nearest dollar.) The amount of the original issue discount Danny must recognize as ordinary income for the first semiannual period is…
Denis purchased a $10,000 face value Ontario Hydro Energy bond maturing in four years. The coupon rate was 6.8% payable semiannually. If the prevalling market rate at the time of purchase was 6.1% compounded semiannually, what price did Denis pay for the bond? (Do not round the intermediate calculations. Round your final answer to 2 decimal places.) Assume that: • Bond interest is paid semiannually. . The bond was originally issued at its face value. • Bonds are redeemed at their face value at maturity. • Market rates of return are compounded semiannually. Coupon Payment Bond price
Find the purchase price of each bond bought on the given dividend date. Use another sheet of paper for your solution. a. Atty. Bustamante agreed to sell her condominium unit to a campanera worth 2.4 million pesos in two payment schedules: On the first 5 months, the price of the unit is amortized at 3% quarterly. The balance amount will be paid at 4% semiannually for 7 months. Prepare the amortization schedule. b. The Cauayan Consumers Cooperative has taken out a 10-year mortgage for P92, 000 at an annual rate of 5%. A table for the monthly payment on PI, 000 loan is used in finding the monthly amortization. Complete the amortization schedule below. Round off your final answer to the nearest cent. Monthly Payment Paid on Payment Number Interest Balance Paid Principal P92, 000 1 2 3
An investor buys a bond for $10,000. The bond pays $200 interest every six months. After 18 months, the investor sells the bond for $9,500. Describe the types of income and/or loss the investor had.
Mr. Estrada purchased 100 5% bonds from Lontok Finance Corporation. Each bond has a face value of P 3,000 and were purchased at P 2,500. The bonds mature in 10 years. a. How much will Mr. Estrada receive as his dividend for all the bonds if dividends are paid semi-annually? b. Compute for its maturity value. The maturity valuei c. After the maturity date, how much is the total earnings of Mr. Estrada?
On April 1 Sampson Corporation purchased $50,000 of Anston Company's 6% bonds at a purchase price of 92. Sampson Corporation, whose year end is December 31, expects to hold the bonds until their maturity date 5 years from the date of purchase. Interest on the bonds will be paid every April 1 and October 1 until maturity. How much cash will Sampson Corporation receive and how much total interest revenue will Sampson Corporation report relative to the first October 1 interest payment, assuming the market rate of interest at the time the bonds were purchased was 8%? O Cash $2,000; Interest Revenue $1,380 O Cash $1,500; Interest Revenue $1,900 O Cash $1,500; Interest Revenue $1,840 O Cash $1,500; Interest Revenue $1,100 O None of the above.
On January 1, 2024, Rupar Retallers purchased $100,000 of Anand Company bonds at a discount of $6,000. The Anand bonds pay 6% interest but were purchased when the market interest rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and December 31 of each year. Rupar accounts for the bonds as a held-to-maturity Investment, and uses the effective interest method. In Rupar's December 31, 2024, journal entry to record the second period of Interest, Rupar would record a credit to interest revenue of Multiple Choice O O $3,000 $3,500 $1.300
Using these numbers, What bonds payable amount will Claire report on this year’s December 31 balance sheet? Claire Corporation is planning to issue bonds with a face value of $170,000 and a coupon rate of 10 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Claire uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 12 percent.(FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. 3. What bonds payable amount will Claire report on this year’s December 31 balance sheet?
Jessica bought a bond on December 1st. The bond was issued on January 1st. The semi-annual coupon is 7% (S1, 000 par). What is the coupon amount Jessica will next receive and how much accrued interest will Jessica pay? Interest to Jessica on 1/1 is $35 and accrued interest when the trade is placed is $29.17 Interest to Jessica on 1/1 is $5.83 and accrued interest when the trade is placed is $29.17 Interest to Jessica on 1/1 is $35 and accrued interest when the trade is placed is S5.83 Interest to Jessica on 1/1 is $70 and accrued interest when the trade is placed is S58.34
On January 1, 2021, Kaye Ltd. purchased $250,000 of Danford Co.'s 4%, 8-year bonds. The market rate was 5%, and Kaye purchased the bonds for $233,681. The bonds pay interest semi-annually, on June 30 and December 31. Kaye uses the amortized cost model and the effective-interest method to recognize interest income on bond investments. Rounding values to the nearest dollar (if necessary), the entry to recognize receipt of the December 31, 2021 interest payment will include: Question 1 options: DR Cash $5,863 DR Cash $5,842 CR Interest income $5,842 CR Interest income $5,863

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