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lord [1]
3 years ago
10

On june 30, 20x1, after paying the semiannual interest due and recording amortization of bond discount, hake redeemed its 15-yea

r, 8% $1,000,000 par bonds at 102. hake has a policy to redeem bonds when it is advantageous to do so. the bonds, which had a carrying amount of $940,000 on january 1, 20x1, had originally been issued to yield 10%. hake used the effective interest method of amortization and paid interest and recorded amortization on june 30. compute the amount of gain or loss on the redemption of the bonds.
Business
1 answer:
Leokris [45]3 years ago
6 0

Amount of interest expense on 30th June 20X1= Carrying Amount of Bond*Effective Interest Rate (For 6 Months)

=$940000*5/100

=$47000

Contractual Interest of the bond=Face Value*Contractual Interest

=1000000*4/100

=$40000

Thus, Carrying Amount of Bond=Carrying Amount|+Interest Expense-Interest Paid

Carrying Amount as on 30th June=940000+47000-40000

Carrying amount as on 30th June=$947000

Amount Paid to Redeem Bonds =$1020000

Gain/(Loss) on Redemtion of Bonds=Face Value-Amount Paid to Redeem Bonds

Loss on Bonds=-$73000

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6 0
2 years ago
Firm A produces desks. It is situated in the US but imports wood from Brazil. Last year it imported $8,000 in lumber and sold 10
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The correct answer is C: 48000

Explanation:

The Expenditure Approach is a method of measuring GDP by calculating all spending throughout the economy including consumer consumption, investing, government spending, and net exports. This method calculates what a country produces, assuming that the finished goods and services of a country equals the amount spent in the country for that period.

<u>The formula is: </u>

GDP=C+I+G+/-NX

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The following information pertains to Obama Company's outstanding stock for the year just ended:
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The 6 months are calculated from Jan 1 to July 1

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