On January 1, 2014, Giamartino, Inc. issues a 4-year bond with a face value of $100,000....

90.2K

Verified Solution

Question

Accounting

On January 1, 2014, Giamartino, Inc. issues a4-year bond with a face value of $100,000. Thesemi-annual interest payments of $6,000 are due July 1 and January1 of each year.
Coupon Rate (or Stated Rate)
12%
Market Interest Rate at Issuance
10%
Discount Rate
No. of Periods/No. of Payments
Time Value Factor
Present Value of $1 Lump Sum
Time Value Factor
Present Value of
Ordinary Annuity
12%
4
0.6355
3.0373
10%
4
0.6830
3.1699
6%
8
0.6274
6.2098
5%
8
0.6768
6.4632
What is the present value of the bond on the date ofissuance?

Answer & Explanation Solved by verified expert

4.4 Ratings (692 Votes)

Concepts Bonds issue price or Present Value is calculated by ADDING the Discounted face value of bonds payable at applicable market rate of interest Face See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!

Become a Member

Coupon Rate (or Stated Rate)	12%
Market Interest Rate at Issuance	10%

On January 1, 2014, Giamartino, Inc. issues a 4-year bond with a face value of $100,000....

90.2K

Verified Solution

Question

Accounting

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Membership Benefits:

Other questions asked by students

Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been...

Should I use the maximum value for the bending moment in the negative area for compression...

True or False A phenotype can be represented by more than one genotype False O...

Last Tuesday, Regal Cinemas sold a total of 8500 movie tickets. Proceeds totaled $64,600. Tickets...

Would the graph for f(x) = - 9x + x + 5 open up or...

9. Please briefly define promissory note, payee, maturity date and a maker. Hint: All four...

Problem 8 Nancy Ball presently operates a retailing proprietorship with a December 31,...

Required information Problem 5-10 Long-term contract; revenue recognition over time [LO5-8,5-9] [The following information applies...

The method used to account for non-strategic investments is the Multiple Choice Effective interest method...

On January 1, 2015, Hogan Enterprises issued 8%, 20-year bonds with a face amount of...

Required information Use the following information for the Exercises below. (Algo) [The following information applies...

The income statement for Sutherland, Inc., appears below. SUTHERLAND, INC Income Statement For the Year...

Discount Rate	No. of Periods/No. of Payments	Time Value Factor Present Value of $1 Lump Sum	Time Value Factor Present Value of Ordinary Annuity
12%	4	0.6355	3.0373
10%	4	0.6830	3.1699
6%	8	0.6274	6.2098
5%	8	0.6768	6.4632