I think it’s D I’m not sure
Answer:
D. Star will be liable on the contract only if it adopts the contract.
Explanation:
Answer:
a. The effect of the tea shipment from India:
Imports:
Direction of change? (increase, decrease, no change)
Magnitude of change = $1,500,000
b. Because of the identity equation that relates to net exports, the (increase/decrease?) in U.S. net exports is matched by (an increase/a decrease?) in U.S. net capital outflow.
c. Examples of how the United States might be affected in this scenario:
The Indian tea producer purchases $1,500,000 worth of stock spread out over a few U.S. companies.
The Indian tea producer hangs on to the $1,500,000 so that it can use the U.S. dollars to make investments.
Explanation:
The net exports identity equation "Net Capital Outflow = Net Exports" measures the imbalance between a country's exports and imports. It also measures the imbalance between the foreign assets bought by domestic residents and the domestic assets bought by non-resident foreigners.
Answer:
Journal Entry
March 1
Dr. Cash $4,550,000
Dr. Discount on Note Payable $450,000
Cr. Note payable $5,000,000
December 1
Dr. Interest Expense $450,000
Cr. Discount on Note Payable $450,000
Dr. Note payable $5,000,000
Cr. Cash $5,000,000
Explanation:
Note payable is document which is payable after a specific period of time.
Note Payable is recorded at the present value of the note face value. We need to discount the face value of the note first.
Interest on the bond = $5,000,000 x 12% x 9/12 = $450,000
On December 31 Interest expense will be recorded and Payment of Note is made.
