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2 years ago

Respond to the following discussion question(s):

Business

1 answer:

tangare [24]2 years ago

8 0

Answer:

1. A commercial bond is a type of surety bond that serves the purpose of guaranteeing the credibility of business people and making sure they follow the laws governing their field. If a person believes that they have been the victim of a commercial bond holder failing to follow the laws, then they can file a claim with the surety from whom the bondholder purchased the bond. In this way, the surety acts as an insurer.

A company might use bonds rather than finance a project by using a bank because banks have higher interest rates and more restrictions than commercial bonds. The ability to borrow large sums at low-interest rates allows corporations to invest in growth and other projects. Issuing bonds also give companies greater freedom to operate as they see fit. Bonds release firms from the restrictions that are often attached to bank loans.

2. When using the effective interest method, the debit amount in the discount on bonds payable is moved to the interest account. Therefore, the amortization causes interest expense in each accounting period to be higher than the amount of interest paid during each year of the bond's life.

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frosja888 [35]

Answer:

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1 year ago

At the beginning of the year, Ann and Becky own equally all of the stock of Whitman, Inc., an S corporation. Whitman generates a

algol13

Answer:

1. Share of Ann's Loss: $31,048

2. Share of Becky's Loss: $60,000

3. Maximum Loss Allowed: $41,300

Explanation:

The total loss for the year is $120,000 and both Ann and Becky own 50% each.

1. Share of Ann's Loss:

Ann had ownership of Whitman Inc. for 189 days which means the 50% of the total loss would be further lessened by 189/365 factor.

Mathematically:

Ann's Loss = $1,20,000 * 50% * (189/365) = $31,048 Loss

2. Share of Becky's Loss:

This means that the share of loss for Becky would be = $120,000 * 50%

= $60,000

3. Maximum Loss Allowed:

As the stock basis is $41,300, hence the maximum loss for Becky would be $41,300.

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3 years ago