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2 years ago

What are the purposes of (b) the balance sheet

1 answer:

5 0

The balance sheet of a company provides important information on the assets owned by the company, its liabilities, and the shareholder’s equity. They are essentially financial statements that outline the financial condition and history of a company.

Balance sheets have various purposes. They help stakeholders to assess and evaluate the business, and take important decisions that promote their interests.

The management may use it to strategize and chart out future plans to cut costs, invest and expand in certain areas, etc. Investors use it to decide whether or not to pour money into the company. Lenders evaluate the credit worthiness of the company, and decide on forwarding loans to it.

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On May 1, 2017, Pronghorn Company issued 2,500 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shor

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Answer:

a. Prepare the entry to record the issuance of the bonds and warrants

May 1, 2017, bonds issuance

Dr Cash 2,550,000

Dr Discount on bonds payable 25,000

Cr Bonds payable 2,500,000

Cr Additional paid in capital - stock warrants 75,000

b. Assume the same facts as part (a), except that the warrants had a fair value of $30. Prepare the entry to record the issuance of the bonds and warrants.

May 1, 2017, bonds issuance

Dr Cash 2,550,000

Cr Bonds payable 2,500,000

Cr Premium on bonds payable 20,000

Cr Additional paid in capital - stock warrants 30,000

Detachable warrants must be recorded separately than the bonds. They must be recorded as APIC stock warrants.

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3 years ago

Considerable research has documented that in many product categories, consumers are unable to distinguish among brands when give

kirill115 [55]

Answer:

brand loyalty

Explanation:

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In the question above, the given statement represents brand loyalty.

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3 years ago

Which of the following is true about duration and modified duration?

My name is Ann [436]

Answer:

The truth about Macaulay Duration and Modified Duration is:

d. All are true.

Explanation:

Principally, the Macaulay Duration, used mainly with immunization strategies, measures the weighted average time an investor holds a bond until the period when the present value of the bond’s cash flows equals to the initial bond amount.

On the other hand, the Modified Duration, providing a risk measure by being sensitive to interest rates, identifies the amount by which the duration changes for each percentage change in the yield and, at the same time, measures how the amount of a change in the interest rates impacts a bond's price.

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