Answer:
interest payable 66,000
note payable 384,000
Land 325,000
Gain on disposal 125,000
Explanation:
600,000 x 11% = 66,000 interest payable
the land is being used to settle the note along with the accrued interest at the time:
the accounting of Transit developments record the land at cost: 325,000
as the market valuye is 450,000 so a gain for 125,000 will be recognize.
450,000 market value - 66,000 interest payable: 384,000 payment on the note principal
the entry will write-off the interest payable, decrease the note by that amount and recognize the land gain on disposal
Answer:
$6,000
Explanation:
The net operating income will increase by $6,000;
$70,000*30%-$15,000=$6,000
As the CM ratio is 30% and $15,000 are fixed expenses,net result will be increase in net operating income.
The Current yield on the bonds are calculated as :
Current yield = Annual coupon payments/ Current price
Here, we assume the face value of the bond to be $1000
Annual coupon payments are 10.6% of the face value or 0.106*1000 = 106
Current price = 108.1% of the face value = 1.081* 1000 = 1081
Current Yield = 106/1081
Current Yield = 0.098057 = 9.8057%
Current Yield = 9.81% (Rounded to two decimals)
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