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Anastaziya [24]
4 years ago
9

Prince Company acquires Duchess, Inc. on January 1, 2016. At the date of acquisition, Duchess has long-term debt with a fair val

ue of $1,500,000 and a carrying amount of $1,200,000.
With respect to long-term debt consolidation worksheet adjustments in periods following the acquisition, which of the following is correct:

Multiple Choice:

Debit Interest Expense and Credit Long-Term Debt Expense.

Prince must recognize an increase in interest expense if the amount is material.

Do not adjust the value of the debt because Prince is not obligated to repay the debt.

Credit Long-Term Debt and Debit Interest Expense on the balance sheet of Duchess.

Debit Long-Term Debt and Credit Interest Expense.
Business
1 answer:
vlabodo [156]4 years ago
5 0

Answer:

Debit Interest Expense and Credit Long-term Debt Expense.

Explanation:

When Price is acquiring the Duchess Incorporation, it is agreeing upon everything that the Duchess is liable to pay and and receive from any other party. Duchess has a long term debt with a fair value of $1500000, which needs to be paid by the acquiring company now i.e. Prince. Hence, the interest expense would be paid and the long-term debt expense would be decreased by the same amount.

Therefore, for that the entries would be as follows:

                                                     Debit             Credit

Interest Expense                           $xxx

Long-term debt expense                                    $xxx

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The accounts receivable account has a beginning balance of $10,000 and the company provides services of $50,000 on account durin
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Poorly timed discretionary macroeconomic policy can do more harm than good. getting the timing right with fiscal policy is gener
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8 0
2 years ago
Real GDP per capita is not a perfect measure of the well-being of a country's individual citizens because: Instructions: You may
nasty-shy [4]

Answer:

it does not measure quality-of-life factors ; it does not account for distribution of wealth ; it fails to measure non monetary (home production) activities

Explanation:

Real GDP is the total value of goods & services produced in an economy, during a period of time. But it is not correct measure of welfare level.

  • It does not measure non monetary production, like hobby production eg kitchen gardening, self made paintings, music. But, they increase welfare
  • It does not take into consideration the qualitative factors affecting welfare like pollution, crime & literacy. Externalities cause extra benefit or harm to welfare level, but are excluded from GDP.
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4 0
3 years ago
Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $47,7
LenaWriter [7]

Answer:

$41,650

Explanation:

Contribution margin is the net of sales and variable costs.

Contribution Margin:

Division A = $47,700

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Company calculates the Net Income after deducting The traceable and common fixed costs from the total contribution margin.

Total contribution margin = $47,700 + $80,850 = $128,550

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$27,200 = $68,850 - Common Fixed expenses

Common Fixed expenses = $68,850 - $27,200 = $41,650

4 0
3 years ago
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