Answer:
$28.57
Explanation:
The holders of ZZZ corporation bonds with a face value of $1000
It can be exchanged for 35 share of the stock
The stock is being sold for $25.00
Therefore, the conversion price can be calculated as follows
= $1000/35
= $28.57
Hence the conversion price is $28.57
When the rate of inflation rises, people generally pay more for most products
Answer:
On November 27
Debit Retained earnings $12,750
Credit Dividend payable $12,750
<em>(To record the dividend declared)</em>
On December 24
Debit Dividend payable $12,750
Credit Cash $12,750
<em>(To record dividend paid) </em>
Explanation:
- Dividends on gains on shares bought by the shareholders. They arise due to appreciation in share price and improvement in company's net income.
- The dividend payable was calculated as $.5 x 25,500 shares = $12,750.
- Dividends are usually paid out of retained earnings.
- The dividend payable account is debited when payment is to be made.
Answer:
debt trap
Explanation:
In simple words, debt trap refers to the situation when a company keeps on incurring debt for repaying off the loans taken earlier. It is called trap as the amount of interest on loan keeps on building up making it impossible for the firm to pay it off completely.
Usually the firms starts getting in debt trap when they lack of funds or due to failure of the specific project for which the loans has been taken specifically. Once the firm gets inside such a situation stepping back becomes nearly impassible leading to complete shut down of the firm.
The answer is under $25,000
