AC_391_Spring_2010_Exam_2_problem_soluti

AC_391_Spring_2010_Exam_2_problem_soluti - Exam 2 Solutions...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam 2 Solutions and Practice Pr Problem 1: In this problem, you must determine the PV of a note receivable and a) Face amt of note 200,000 Discount (market) rate 5% Time till paid 3 PV 172,768 Sale Price (PV of note) 172,768 (see note) less: Book value 200,000 Gain (loss) on sale (27,232) dr. cr. b) Note receivable 172,768 Accumulated depreciation 100,000 Loss on sale 27,232 Building 300,000 c) Note receivable (or int rec) 8,638 Interest revenue 8,638 Problem 2: In this problem, you must first determine the cash to be received by Face of bond 1,000 coupon rate 10% market rate 6% duration/maturity 10 years Annual cash to Maturity cash to total cash to Year be Received be Received be Received 1 100 0 100 2 100 0 100 3 100 0 100 4 100 0 100 5 100 0 100 6 100 0 100 7 100 0 100 8 100 0 100 9 100 0 100 10 100 1,000 1,100 value of bond a) 1,294 debit credit b) Bonds Receivable 1,000 Premium on Bonds 294
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Cash 1,294 c) Cash 100 Premium on Bonds 22 Interest revenue 78 NOTE! I graded this problem using a 10 year bond. I believe I told you in
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/30/2010 for the course ACCOUNTING AC391 taught by Professor Seller during the Spring '10 term at Laguna College of Art and Design .

Page1 / 6

AC_391_Spring_2010_Exam_2_problem_soluti - Exam 2 Solutions...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online