Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually.

Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

A) $102,323.

B) $84,557.

C) $104,376.

D) $100,000.

Answer: C

Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use a financial calculator or Excel)

A) $104,265.

B) $95,842.

C) $71,906.

D) $100,000.

Answer: B

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually.

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 6%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use a financial calculator or Excel)

A) $163,200.

B) $186,410.

C) $214,877.

D) $200,000.

Answer: C

Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

A) $104,625.

B) $95,842.

C) $71,906.

D) $100,000.

Answer: B

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

A) $139,609.

B) $186,410.

C) $214,877.

D) $200,000.

Answer: B

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 6%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

A) $163,200.

B) $186,410.

C) $214,878.

D) $200,000.

Answer: C

Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond (rounded to nearest whole dollar? (Use a financial calculator or Excel)

A) $139,609.

B) $186,410.

C) $214,877.

D) $200,000.

Answer: B

Air Destinations issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually

Air Destinations issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. What is the issue price of the bond? (Use Table 2 and Table 4, contained within a separate file.)

A) $537,194.

B) $464,471.

C) $359,528.

D) $500,000.

Answer: B

Air Destinations issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

A) $537,194.

B) $464,469.

C) $538,972.

D) $500,000.

Answer: C

Air Destinations issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use a financial calculator or Excel)

A) $537,194.

B) $464,469.

C) $359,528.

D) $500,000.

Answer: B

Air Destinations issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use a financial calculator or Excel)

A) $537,194.

B) $464,469.

C) $538,973.

D) $500,000.

Answer: C

Ordinarily, the proceeds from the sale of a bond issue will be equal to:

A) The face amount of the bond.

B) The total of the face amount plus all interest payments.

C) The present value of the face amount plus the present value of the periodic interest payments.

D) The face amount of the bond plus the present value of the periodic interest payments.

Answer: C

The issue price of a bond is equal to:

A) The future value of the face amount only.

B) The present value of the interest only.

C) The present value of the face amount plus the present value of the periodic interest payments.

D) The future value of the face amount plus the future value of the periodic interest payments.

Answer: C

In calculating the issue price of a bond, the portion associated with the periodic interest payments is calculated using which time value factor?

A) Future value of $1.

B) Present value of $1.

C) Future value of an ordinary annuity of $1.

D) Present value of an ordinary annuity of $1.

Answer: D

In calculating the issue price of a bond, the portion associated with the principal is calculated using which time value factor?

A) Future value of $1.

B) Present value of $1.

C) Future value of an ordinary annuity of $1.

D) Present value of an ordinary annuity of $1.

Answer: B

The Viper retires a $40 million bond issue when the carrying value of the bonds is $42 million, but the market value of the bonds is $36 million

The Viper retires a $40 million bond issue when the carrying value of the bonds is $42 million, but the market value of the bonds is $36 million. The entry to record the retirement will include:

A) A credit of $6 million to a gain account.

B) A debit of $6 million to a loss account.

C) No gain or loss on retirement.

D) A credit to cash for $42 million.

Answer: A

The Raptor retires a $20 million bond issue when the carrying value of the bonds is $18 million, but the market value of the bonds is $15 million. The entry to record the retirement will include:

A) A debit of $3 million to a loss account.

B) A credit of $3 million to a gain account.

C) No gain or loss on retirement.

D) A credit to cash for $18 million.

Answer: B

The Titan retires a $20 million bond issue when the carrying value of the bonds is $18 million, but the market value of the bonds is $23 million. The entry to record the retirement will include:

A) A debit of $5 million to a loss account.

B) A credit of $5 million to a gain account.

C) No gain or loss on retirement.

D) A credit to cash for $18 million.

Answer: A