1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Norma-Jean [14]
1 year ago
15

rick's pawn shop issued 11% bonds, dated january 1, with a face amount of $400,000 on january 1, 2022. the bonds sold for $370,0

00. for bonds of similar risk and maturity the market yield was 12%. interest is paid semiannually on june 30 and december 31. rick's determines interest at the effective rate and elected the option to report these bonds at their fair value. on december 31, 2022, the fair value of the bonds was $365,000, with $2,000 of the change due to a change in general interest rates. rick's statement of comprehensive income will include:
Business
1 answer:
geniusboy [140]1 year ago
6 0

An unrealized gain of $5,412 from the change in the fair value of the debt.

<h3>How does general interest rate risk work?</h3>

Interest-rate risk (IRR) is the exposure of a financial institution to unfavorable changes in interest rates. Accepting this risk is common practice in the banking industry and can be a key driver of profitability and shareholder value.

Explanation:

Given that the bond's face value is $400 000

Bond selling price: $370,000

yield until maturity equals 12%

Bond has a fair value of $365,000.

Value shifted = $2,000

Net income and OCI are both included in comprehensive income.

To learn more about Interest-rate risk (IRR) refer to:

brainly.com/question/20715710

#SPJ4

You might be interested in
What are the two views on why asset prices fluctuate so much that they lead to financial crises and bank​ failures?
tester [92]

In one view, the asset prices are objectively based on fluctuating principles, whilst in the certain, psychological factors and prejudices play an important role.

Explanation:

As the rate of interest increases, the price of the investments declines because the yield on risk-free investing can sometimes be greater to buyers. On the other hand, the price of assets is rising as interest rates are falling.

This is usually the interest rate owed by small investors on an approved FDIC portfolio, checking account, term deposit acct or mutual fund of the monetary sector. This is now the so-called US "risk-free" limit for bigger creditors, companies and individuals. Bills for the Treasury.

6 0
3 years ago
For each of the following accounts, indicate the effect of a debit or a credit on the account and the normal balance.
vladimir2022 [97]

Answer:

a. Accounts Payable

Accounts payable have a credit balance and will increase under credit effect and decrease under debit effect.

b. Advertising Expense

Advertising expense has a debit balance and will increase in case of debit effect and decrease in case of credit effect.

c. Service Revenue

Service revenue will be credited and will increase in case of credit effect and decrease in case of debit effect.

d. Accounts Receivable

Accounts receivables will be debited and increase under debit effect and decrease under credit effect.

e. Retained Earnings

Retained earnings will be credited and will increase in case of credit effect and decrease in case of debit effect.

f. Dividends

Dividends will be debited which will lead to an increase in it under debit effect and decrease under credit effect.

4 0
3 years ago
Of the following tasks, which one is least likely to be part of an administrative professional job today ?
Bogdan [553]
You didn’t leave choices to pick from
7 0
3 years ago
a machine produces 374 bolts in 33 minutes. At the same time rate how many minutes would it take to produce 272 bolts
hammer [34]
The answer is 24 minutes.

3 0
3 years ago
What are the benefits of thinking about retirement expenses now?.
Dennis_Churaev [7]

Answer:

The Benefits of Retirement Planning Are More Important Now, Than Ever Before.

Know how much you need to retire.

Peace of Mind.

Make smarter decisions.

Reduce your tax burden.

Have a unified vision for retirement.

Prepare for healthcare expenses.

Retire on your own terms.

Explanation:

4 0
2 years ago
Other questions:
  • On june 1 of the current year, jack and angie purchased a rental beach house for $900,000 and rented it right away. of that amou
    7·1 answer
  • "what is unsolicited email that plagues employees at all levels and clogs email systems?"
    14·1 answer
  • With a patent on drug Z27, why would Able Drug Company charge customers $7 per 100 units even though its cost of producing 100 u
    10·1 answer
  • A vacation house in Colorado is
    10·1 answer
  • Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. Durin
    9·1 answer
  • An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest payments, and is
    6·2 answers
  • "Wants" as an economic concept includes only goods and services that consumers need but cannot afford to buy. both material and
    11·1 answer
  • Two different suppliers are competing to supply a particular part for a new Boeing airliner. The Japanese supplier charges J(n)
    5·1 answer
  • Chapter 4 developing a business plan
    7·1 answer
  • Chelsea bought a bond with a face value of $5,000. The bond has a term of 4 years. Chelsea bought the bond at a 3 percent discou
    14·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!