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3 years ago

What is generally the reason for a company to issue bonds?

Business

1 answer:

valkas [14]3 years ago

4 0

The general reason for a company to issue a bond is to "Raise Money" and that's one of the main reason they do it.

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Hello anyone know carson lueders

GalinKa [24]

Answer:

Im not sure who he is

Explanation:

5 0

3 years ago

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Mills Corporation acquired as a long-term investment $200 million of 7% bonds, dated July 1, on July 1, 2018. Company management

Evgen [1.6K]

Answer:

investment on bonds 200 millions

premium on bonds 40 millions

cash 240 millions

to record the purchase of bonds

cash 7 millions

interest revenue 6 millions

premium on bonds 1 million

interest proceeds of december 31th

Balance sheet:

bonds 200

premium 39

net 239

cash 250 millions

investment on bonds 200 millions

premium on bonds 39 millions

gain on sale of invesment 11 millions

to record the sale of bonds

Explanation:

<u>recording the bonds:</u>

acquisition 240

bonds face value (200)

premium 40

It is a premium, as the bonds where purchased at higher price than face value

<u>Interest at December 31th</u>

To calculate the interest, we will calcualte the interest per payment:

7% annual coupon rate /2 payment per year = 3.5% semi-annual rate

5% market rate /2 payment per year = 2.5% semi-annual market rate

cash proceeds: 200 x 3.5% = 7

interest revenue:

carrying value x market rate

240 x 2.5% = 6

amortization 7 - 6 = 1

<u>Value in the balance sheet:</u>

the net value of the bond will be the face value plus the carrying value of the premium

<u>Sale of the bonds:</u>

selling price 250

carrying value of the bonds (239)

gain on sale of bonds 1 1

It is a gain, as the bonds are being sold at a higher price than his carrying value.

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3 years ago

What are some items that you like to buy or wish you could buy?

Gekata [30.6K]

Answer:

computer or brainly plus

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3 years ago

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Since the 1970s, the largest area of job growth in the United States has been in the ______ sector; areas such as banking, healt

JulsSmile [24]

The largest area of job growth in the United States has been in the service sector.

<h3>What are the service sectors?</h3>

The service sector is commonly known as the tertiary sector. It is also known to be the third tier in the three-sector economy.

An Examples of service sector jobs are housekeeping, nursing, etc. The Service industries is made up of:

Banking
Communications
Wholesale and retail trade, etc.

Conclusively, The largest area of job growth in the United States as at 1970s has been in the service sector.

Learn more about service sector from

brainly.com/question/26521390

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2 years ago

Hughes Corporation is considering replacing a machine used in the manufacturing process with a new, more efficient model. The pu

pogonyaev

Answer:

50,000

Explanation:

Hughes Corporation can calculate the incremental cash outflow required to acquire the new machine by just deducting the sales proceeds from the cost of the new machine.

DATA

New machine = $150,000

Old machine = 100,000

Cash outflow per year (18,000 - 10,000) = 8,000

Salvage value = 25,000

Annuity factor = 8%

Solution

Incremental Cash outflow = Cost of new machine - Sales proceeds from old machine

Incrementa Cash outflow = 150,000 - 100,000

Incremental Cash outflow = $50,000

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3 years ago