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anastassius [24]
3 years ago
9

The answer to this? Thanks

Business
1 answer:
Veseljchak [2.6K]3 years ago
3 0
The answer is B I believe 
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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.

<u>first interest payment </u>

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

less actual cash outlay:  13,000,000

amortization                          252,777.69

<u>second interest payment</u>

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

less actual cash outlay:                      <u>     13,000,000.00</u>

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
Choose all that apply.
Dima020 [189]

1.tracking your spending 2.avoiding impulse purchases 3.using credit cards infrequently

4 0
3 years ago
Read 2 more answers
Over the last ten years productivity grew faster in Oceania than in Freedonia and the population and total hours worked remained
Anvisha [2.4K]

Answer:

it's d. All are correctamundo

8 0
3 years ago
If a company spends $20 million to install new footwear-making equipment with capacity to produce 1 million pairs of athletic fo
labwork [276]

Answer: 10% or $2,000,000

Explanation:

Seeing as no figures were produced, we will have to do this ourselves.

We will make assumptions which include the following,

Life of the equipment = 10 Years

Salvage value = 0

Those are our 2 assumptions.

In that case then,

The Annual Depreciation will be,

Depreciation = (Cost of equipment - Estimated salvage value) / Estimated useful life

= (20 - 0) / 10

= $2 million

Seeing as 2 million is,

= 2/20 * 100

= 10%

That would mean that annual depreciation costs at that facility will rise by $2 million or 10%.

If you need any clarification do react or comment.

3 0
3 years ago
During the ________ of the product life cycle, the growth of a product begins to plateau, and the company must take advantage of
natulia [17]

Answer:

During the growth stage of the product life cycle, the growth of a product begins to plateau, and the company must take advantage of economies of scale and marketing messages and promotions that seek to remind customers about a great product, differentiate from competitors, and reinforce brand loyalty.

Explanation:

Hope this helped

4 0
2 years ago
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