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3 years ago

If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are:

Business

1 answer:

lys-0071 [83]3 years ago

8 0

Answer:

Recognized as revenues in the debt service fund.

Explanation:

Debt Service fund is a term that is used to describes a form of cash reserve utilized in the payment of interest and principal on specific kinds of debt for a given period. For example, bond premiums are commonly imposed by state law to be moved to debt service funds.

Hence, If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are: Recognized as revenues in the debt service fund.

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Universal Foods issued 10% bonds, dated January 1, with a face amount of $260 million on January 1, 2018. The bonds mature on De

kondaur [170]

Answer:

The bonds were issued at $220,879,628.13

This is lower than the face value to compensate for the lower coupon payment.

cash 220,879,628.13 debit

discount on BP 39,120,371.87 debit

bonds payable 260,000,000 credit

--to record the issuance of the bonds--

Interest expense 13,252,777.69 debit

Discoun on BP 252,777.69 credit

cash 13,000,000 credit

--to record the first interest payment--

Interest expense 13,267,944.35 debit

Discount on BP 267,944.35 credit

Cash 13,000,000 credit

--to record second interest payment--

Interest expense 13,539,156.67 debit

Discount on BP 539,156.67 credit

cash 13,000,000.00 credit

--to record Dec 31st, 2025 payment--

Explanation:

To determinate the price we will solve for the present value of the coupon payment and maturity at the market rate of %12

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

Coupon payment:

260,000,000 x 10% x 1/2 =13,000,000.000

time 20 years x 2 payment per year 40

yield to maturity 12% / 2 = 6%

$13000000 \times \frac{1-(1+0.06)^{-40} }{0.06} = PV\\$

PV $195,601,859.3298

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 260,000,000.00

time 40.00

rate 0.06

$\frac{260000000}{(1 + 0.06)^{40} } = PV$

PV 25,277,768.80

PV c $195,601,859.3298

PV m $25,277,768.8042

Total $220,879,628.1340

For the journal entries, we will multiply this current market price of the bonds by the market rate (YTM) the difference between this and the actual cash obligation generate by the bond is the amortization of the discount.

first interest payment

$220,879,628.13 x 6% = 13,252,777.69

less actual cash outlay: 13,000,000

amortization 252,777.69

second interest payment

($220,879,628.13- $252,777.69) x 6% = 13,267,944.35

less actual cash outlay: 13,000,000.00

amortization 267,944.35

December 31st, 2025:

This will be payment 14th

after building the schedule until that date we got:

8 0

3 years ago

What does SME stand for

boyakko [2]

Answer:

Subject Matter Expert and Small and Medium Enterprise

Explanation:

the abbreviation for "Subject Matter Expert"

and "Small and Medium Enterprise"

5 0

3 years ago

Read 2 more answers

If the federal funds rate were above the level the Federal Reserve had targeted, the Fed could move the rate back towards its ta

Dmitriy789 [7]

Answer:

The correct answer is option b.

Explanation:

If the federal fund's rates were above the targeted rate, the Fed would need to move it towards the targeted rate. To move the interest rate towards the targeted rate, the government would need to increase the money supply. This can be done by buying bonds. When the Fed buys bonds they pay for it, this causes the money supply to increase. As the supply curve shifts to the right, the interest rate will fall down.

4 0

3 years ago

You own a portfolio of two stocks, a and

Furkat [3]

Stock a is $2000. Calculate 10.5% of $2000, which equals $210.
Stock b is $3000. Calculate 14.7% of $3000, which is $441.

The expected return on the portfolio is $210 + $441, which equals $651.

7 0

3 years ago

While making purchase decisions, which of the following products is most likely to elicit the greatest reference group influence

Iteru [2.4K]

Answer: a car

Explanation:

While making purchase decisions, the product that is most likely to elicit the greatest reference group influence will be a car.

This because when an individual has a car, other people see the person and use that as a reference group. It should also be noted that a good thatbis considered public good has a strong influence group.

3 0

3 years ago