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tigry1 [53]
3 years ago
13

A company issues bonds with a $100,000 par value, an 8% annual contract rate, semiannual interest payments, and a five year life

. The bonds sold for $107,850. The entry to record the issuance of the bonds will include:
Business
1 answer:
Juli2301 [7.4K]3 years ago
3 0

Answer:

                                          Dr.           Cr.

Cash                            $107,850

Bond Payable                               $100,000

Premium on Bond Payable          $7,850

Explanation:

When the Bond is issued on the price more than its face value, the exptra amount from face value received is called Bond Premium.

Bond Face value = $100,000

Issuance price = $107,850

Premium Paid =$107,850 - $100,000 = $7,850

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Answer:

d. it causes profits to be understated when prices are rising and allows a company to dodge taxes.

Explanation:

The LIFO method should not be permitted to determine the net income as in this case the profits would be understated at the time when price is increased due to this it permits the company to dodge taxes as the inventory consumed in the production process also the high inventory value would be involved in the cost of sales that represent the high cost, this result in lower profits and taxes

Hence, the option d is correct

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3 years ago
At the beginning of 2020, the company purchased a machine that had a cost of $300,000, an
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3 0
2 years ago
Why is it relevant that finance tends to attract large amounts of money? a. Money can be used for good or evil b. Finance attrac
SpyIntel [72]

Answer: c. Financial markets are a critical components of economic success

Explanation:

Economic success runs on companies and individuals being able to produce goods and services for the economy. To be able to do so they need capital to invest and most times they don't have that capital.

This is where Finance comes in. It connects people who do not have the capital but want to produce to those that have the capital but do not necessarily want to produce.

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6 0
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Who in the u.s. is responsible for maintaining money's purchasing power? the senate congress the board of governors of the feder
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3 years ago
If one-year nominal interest rate in the U.S. is 3%, while the one-year nominal interest rate in Australia is 5%. The spot rate
Mariana [72]

Answer:

to get 5,00,000 australian dollar at the forward rate we are goign to need 4,704,000 US dollars

Explanation:

spot x (1 + (US rate - Australia rate) x time)

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2 years ago
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