Wildhorse Inc has issued three types of debt on January 1 20

Wildhorse Inc. has issued three types of debt on January 1, 2017, the start of the company\'s fiscal year (a) $11 million, 9-year, 14% unsecured bonds, interest payable quarterly. Bonds were priced to yield 10% (b) $27 million par of 9-year, zero-coupon bonds at a price to yield 10% per year (c) $15 million, 9-year, 9% mortgage bonds, interest payable annually to yield 10% Prepare a schedule that identifies the following items for each bond: (1) maturity value, (2) number of interest periods over life of bond, (3) stated rate per each interest period, (4) effective-interest rate per each interest period, (5) payment amount per period, and (6) present value of bonds at date of issue. (Round stated and effective rate per period to 2 decimal places, e.g. 10.25%. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Unsecured Bonds Zero-coupon BondS Mortgage Bonds (1) Maturity value (2) Number of interest periods (3) Stated rate per period (4) Effective rate per period (5) Payment amount per period (6) Present value 11000000 270 2.50 % 0/% 385000 1350 114506

Solution

Unsecured Bonds

Zero-Coupon Bonds

Mortgage Bonds

(1)

Maturity value

$11,000,000

$27,000,000

$15,000,000

(2)

Number of interest

36

9

9

periods

(3)

Stated rate per period

3.75% (

14%

)

0%

9%

4

(4)

Effective rate per period

2.5% (

10%

)

10%

10%

4

(5)

Payment amount per period

$385,000^(a)

$0

$1,350,000^(b)

(6)

Present value

$9,960,395^(c)

$11,450,636^(d)

$14,136,150^(e)

^(a)$11,000,000 X 14% X 1/4 = $385,000

^(b)$15,000,000 X 9% = $1,350,000

^(c)Present value of an annuity of $385,000

          Discounted at 4% per period for

^(d)Present value of $25,000,000 discounted

          at 10% for 9 periods

^(e)Present value of an annuity of $1,350,000 discounted

          At 10% for 9 periods

		Unsecured Bonds		Zero-Coupon Bonds		Mortgage Bonds
(1)	Maturity value	$11,000,000		$27,000,000		$15,000,000
(2)	Number of interest	36		9		9
	periods
(3)	Stated rate per period	3.75% (	14%	)	0%		9%
		4
(4)	Effective rate per period	2.5% (	10%	)	10%		10%
		4
(5)	Payment amount per period	$385,000(a)		$0		$1,350,000(b)
(6)	Present value	$9,960,395(c)		$11,450,636(d)		$14,136,150(e)