In determining present value, a company moves backward in time using a process of accumulation.

The following information pertains to Arrow Corp.’s issuance of bonds on July 1, 20X5: Face amount $1,100,000 Term 6 years Stated interest rate 6% Interest payment dates Annually on July 1 Yield 8% At 6% At 8% Present value of $1 for 6 periods 0.705 0.63 Future value of $1 for 6 periods 1.419 2.587 Present value of ordinary annuity of $1 for 6 periods 4.917 4.623 What should be the issue price for each $2,000 bond (550 individual bonds comprise the entire bond issue)?  

On January 1, 2020, Stardew Company sold to Lewis Company $920,000 of its 9% bonds for $814,472 to yield 11%. Interest is payable semiannually on January 1 and July 1. What amount should Stardew report as interest expense for the six months ended June 30, 2020?  

Jordan Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capacity, the only difference is the price. Location A may be purchased for $405,000. Location B may be acquired with a down payment of $95,000 and annual payments at the end of each of the next eighteen years of $45,900. Location C requires $47,010 payments at the beginning of each of the next twenty-four years. Assuming Jordan’s borrowing costs are 12% per annum, which option is the least costly to the company?

If two annuities have the same number of rents with the same dollar amount, but one is an annuity due and one is an ordinary annuity, the future value of the annuity due will be greater than the future value of the ordinary annuity.

In preparing a statement of cash flows, cash flows from operating activities

Significant financing and investing activities that do not affect cash are not reported in the statement of cash flows or any other place.

A forklift costing $45,100 was purchase on April 1st of 2020. The forklift has a salvage value of $8,050 and an estimated life of 8 years and is depreciated using the straight-line method. On December 31, 2022, before adjusting entries are made the estimated total useful life is revised to 5 years with no change in the salvage value. The depreciation expense for 2022 would be (Round intermediate calculations and final answer to 2 decimal places, e.g. 52.75.)

Which of the following should be excluded from long-term liabilities?

On January 1, year 1, Jerry Corp issued $190,000 par value, 5% five-year bonds when the market rate of interest was 6%. Interest is payable annually on December 31. Bonds mature in 5 years. The following present value information is available: 5% 6% Present value of $1 (n=5) 0.78353 0.74726 Present value of a ordinary annuity (n=5) 4.32948 4.21236 What amount is the value of net bonds payable at the end of year 1?