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V125BC [204]
3 years ago
15

Knowledge Check 01 Zeta Corporation issues $100,000 of 8% bonds maturing in 10 years on January 1, Year 1, when the market rate

of interest is 9%. The bonds were issued at a discount, Market interest rates drop to 7% by December 31, Year 1. The company retires these bonds on December 31, Year 1. How much did it cost the company to retire them? Multiple Choice $106,595 $100,000 o oo $93,496
Business
1 answer:
alexandr1967 [171]3 years ago
8 0

Answer:

$106,595

Explanation:

Given:

Initial market rate = 9%

Dropped market interest rate, r = 7% per year

or

= 7% × [6 ÷ 12]

= 3.5% = 0.035

Remaining time, n = 9 years = 18 semi annual periods

Now,

Value of the bond at the retirement

= [ PVAF × Interest payment] + [ PVF × face value]

here,

Present value of annuity factor, PVAF = \frac{1 -(1+r) ^{-n}}{r}

or

PVAF = \frac{1 -(1+0.035) ^{-18}}{0.035}

or

PVAF = 13.189

And,

Interest payment = $100,000 × 8% × [6 ÷ 12 ]              [since, 8% bonds]

= $4000

Present value factor = \frac{1}{1.035^{18}}

= 0.538

par value = $100,000

= [13.189 × $40] + [0.538 × 100,000]

= 52,758.7316 + 53,836.114

= $106,595

Hence,

The correct answer is option $106,595

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A ________ nation is one with unstable leadership, whose policies are driven by ideology rather than by economic or human costs
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3 years ago
The Xu Corporation uses a periodic inventory system. The company has a beginning inventory of 1,950 units at $22 each on January
kramer

Answer:

$21,770

Explanation:

The computation of cost of goods sold is shown below:-

= (1,950 × $22) + (2,200 × $21) + (1,050 × $23)

= $42,900 + $46,200 + $24,150

= $113,250

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= $5,200

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3 0
3 years ago
"do we build a house forever? do we make a home forever? do brothers divide an inheritance forever? do disputes prevail in the l
Marat540 [252]

Answer:

So is ; There is much similarity between human actions and natural actions, there will always be a consistent response.

Explanation:

It could be said that in each of those questions that invite reasoning they have the same answer; that's the way it is forever ... When one undertakes a project like making or making a house, one has a clear objective to carry it out and that it remains firmly established for a long time or forever, of course if other external factors allow it.

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Balance Sheet Below are items that may appear on the balance sheet. Required: Match each item with its appropriate classificatio
Lerok [7]

Answer:

Item                                               Classification

1. Buildings                                   - Property, plant, and equipment

2. Copyright                                 - Intangible assets

3. Supplies                                  -  Current assets

4. Unearned service revenue   -   Current liabilities

5. Prepaid insurance                 -  Current assets

6. Common stock                      -  Contributed capital

7. Rent payable                          -  Current liabilities

8. Accounts receivable             -   Current assets

9. Allowance for doubtful accounts   - Retained earnings

10 Bonds payable                       - Current liabilities

Explanation:

A. Property, plant, and equipment

Assets of long term nature that are physical fall in this category.

B. Intangible assets

Assets that are of long term and do not have a physical nature fall in this category

C. Current assets

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E. Current assets

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G. Retained earnings

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