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kaheart [24]
3 years ago
11

On January 2, 2017, a calendar-year corporation sold 5% bonds with a face value of $2500000. These bonds mature in five years, a

nd interest is paid semiannually on June 30 and December 31. The bonds were sold for $2292000 to yield 7%. Using the effective-interest method of computing interest, how much should be charged to interest expense in 2017?
Business
1 answer:
Oksanka [162]3 years ago
3 0

Answer:

Consider the following explanation

Explanation:

Under Effective interest method, Interest calculated at the effective interest rate (i.e., the yield of the bond) is charged as an expense annually, and the payment made basis the Coupon rate.

In the given case, interest to be paid semi annually i.e, on June 30 and on December 31, will be $62,500 (i.e., 2,500,000 * 5% * 6/12).

On the basis of above, the interest expense to be charged in the 2017 can be calculated as follows: take a look to the attached archive.

As calculated above, the amount to be charged as interest expense for the year 2017 is (80,220 + 80,840 i.e.,) $ 161,060.

Download xlsx
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Which of the following formulas is used to compute the accounting rate of return?
tekilochka [14]

Answer:

Option (A) is correct.

Explanation:

Accounting rate of return is determined to take the efficient business decision related to the capital budgeting and it tell us whether to accept the proposal or not. The following is the formula:

Accounting rate of return = (Average Income ÷ Initial Investment)

For example:

Net profit for 3 years are as follows:

2012 - 13 = $50 million

2013-14 = $100 million

2014-15 = $150 million

Initial investment = $200

Average profit = ($50 + $100 + $150) ÷ 3

                        = $100

Accounting rate of return = (Average Income ÷ Initial Investment)

                                          = $100 ÷ $200

                                          = 0.5 or 50%

5 0
3 years ago
Occasionally our economy experiences an unusual combination of rising prices and high unemployment. economists have given this u
Alborosie

Occasionally our economy experiences an unusual combination of rising prices and high unemployment. economists have given this unusual pairing the name stagflation.

Stagflation is a combination of the words ‘stagnation’ and ‘inflation’. It refers to the economic trend where there is rising prices yet high levels of unemployment.

It leads to an intractable situation where policy initiatives to boost economic growth such as expansionary monetary policy worsens the inflation rate, while attempts to rein in inflation has a further dampening effect on the economy. It is often caused by poor economic policies.

Stagflation was observed in the US economy during the oil crisis of the 1970s that caused a major recession. But inflation and unemployment rates were at a high during this time.

To learn more about stagflation : brainly.com/question/11224683

#SPJ4

8 0
1 year ago
7. Which of the following is NOT a function of money * 3 points A Unit of account B Store of value C Protection against inflatio
Nuetrik [128]

Answer:

C Protection against inflation

Explanation:

As we know that there are three functions of money i.e.

1. Unit of account

2. Store of value

3. Medium of exchange

There is only 3 functions of money that are shown above

So the protection against inflation would not be considered for the same

And, these 3 would represent the functions of money and can be treated as the unit of account, store of value and the medium of exchange

Hence, the option c is correct

5 0
3 years ago
The payoff matrix represents hypothetical profits that could be earned by two milk sellers who have formed a cartel. each seller
vazorg [7]

For the statement  "The payoff matrix represents hypothetical profits that could be earned by two milk..." and the Milky Mose table  Both will cheat Option C. This is further explained below.

<h3>What is a payoff matrix?</h3>

Generally, payoff matrix is simply defined as when one player's tactics and those of the other are represented in a table called a payoff matrix, they are listed in rows.

In conclusion, In order to get an edge, both parties will engage in dishonesty. As a result, both parties will be tempted to cheat in order to gain an unfair advantage.

The payoff matrix below represents hypothetical profits that could be earned by two milk sellers who have formed a cartel. Each seller must decide if they want to cheat or not to cheat on the production quotas in the cartel agreement. Use the payoff matrix to answer the questions below. Does either member have an incentive to cheat? Heifer's Gold will cheat, but Milky Moo will not. No, neither has an incentive to cheat, Yes, both will cheat. Milky Moo's will cheat, but Heifer's Gold will not

Read more about payoff matrix

brainly.com/question/7656949

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8 0
2 years ago
What can be defined as an information technology environment?
alisha [4.7K]
C. The tools and processes that surround us to gather and interpret data can be defined as an information technology environment. 
Our environment is what surrounds us - so if the environment is technological, then different types of technologies and tools are what fall under that category.
6 0
3 years ago
Read 2 more answers
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