1) On January 1, 2015, Piper Co. issued ten-year bonds with a face value of $ 3,000,000 and a stated interest rate of 10 %, payable semiannually on June 30 and December 31. The bonds were sold to yield 12 %. Table values are:
Present value of 1 for 10 periods at 10 %. 386 Present value of 1 for 10 periods at 12 %. 322 Present value of 1 for 20 periods at 5 %. 377 Present value of 1 for 20 periods at 6 %. 312 Present value of annuity for 10 periods at 10 % 6.145 Present value of annuity for 10 periods at 12 % 5.650 Present value of annuity for 20 periods at 5 % 12.462 Present value of annuity for 20 periods at 6 % 11.470
2) Without prejudice to your solution in part( a), assume that the issue price was $ 2,652,000. Prepare the amortization table for 2015, assuming that amortization is recorded on interest payment dates using the effective-interest method.
3) |
The following information pertains to Parsons Co.: |
Preferred stock, cumulative: |
Par value per share |
$ 100 |
Dividend rate |
8 % |
Shares outstanding |
9,000 |
Dividends in arrears none