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ser-zykov [4K]
3 years ago
11

On January 1, Skills Company purchased as a short-term investment a $1,000, 6% bondfor $1,000. The bond pays interest on January

1. The bond is sold on July 1 for $1,200plus accrued interest. Interest has not been accrued since the last interest payment date.What is the entry to record the cash proceeds at the time the bond is sold?A. Cash...........................................................................1,200 Debt Investments .......................................................1,200B. Cash...........................................................................1,230 Debt Investments........................................................1,000 Gain on Sale of Debt Investments...............................200 Interest Revenue.........................................................30C. Cash............................................................................1,230 Debt Investments........................................................1,200 Interest Revenue.........................................................30D. Cash...........................................................................1,200 Debt Investments........................................................1,000 Gain on Sale of Debt Investments...............................200
Business
1 answer:
Arturiano [62]3 years ago
7 0

Answer:

Option (B) is correct.

Explanation:

Interest accrued for 6 months (January 1 to July 1):

= $1,000 × 6% × (6 ÷ 12)

= $30

This shall be credited to interest revenue as this is the income of the investor.

Sale value of investment:

= Bond selling price on July 1 + Interest accrued for 6 months

= $1,200 + $30

= $1,230

Gain on sale of investment:

= (Selling price - Purchase price) - Accrued interest

= ($1,230 - $1,000) - $30

= $200

Therefore, the Journal entry for this transaction is as follows:

Cash A/c                 Dr. $1,230

To debt investments                  $1,000

To Gain on sale of investment  $200

To Interest revenue                   $30

(To record the cash proceeds at the time the bond is sold)

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What type of economy is an economic system in which private businesses can operate freely with minimal state control?Henry lives
Sonja [21]

Answer:

Private business freedom : Capitalist or Market Economy. Henry is more likely in Socialist Economy.

Explanation:

Economy type in which private sector has full freedom, un-intervened by government or state control is Capitalist or Market Economy. Profit maximisation motive & high consumer choice, sovereignity such economy's main features.

Henry's country which gives incentives to reallocate production choice 'what to produce' (from consumer goods to military goods). He has more efficient idea for work implementation, but lacks incentive (probably due to lack of creative & innovative ideas reward). These features characterise a Socialist Economy, in which government or state has supreme power over central economic decisions. Social welfare is considered priority, government monopoly curbs innovation & creativity, there is less consumer choice, sovereignity.

3 0
3 years ago
1. On June 30, 2018, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to pay Genovese $21,000 on t
Mumz [18]

Answer:

$58,002.60

Explanation:

First, it is clear to include the $21,000 as part of the value of the equipment.

Now, the $9,000 annual payment after every year for six years need to be presented in its present value, meaning what is the value of those future amounts of $9,000 on June 30, 2018.

To calculate the present value of annuity (annuity means constant and equal payments) for those 6 payments of $9,000, we would need the Present Value Factor which is supplied from the Present Value Table.

Looking at 12% for 6 periods ("six annual installments") on the table, it gives the PV factor of 4.1114.

Just multiply $9,000 by 4.1114 and we get 37,002.60

Finally add the downpayment of $21,000 with the present value $37,002.60 and we would get the total value of the equipment of 58,002.60

5 0
3 years ago
After a tax is imposed on the market for bottled water, the price buyers pay is $2.50 per bottle and the price sellers receive i
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The balance of the price in the market is determined by demand and supply, which are measured in terms of the price and quantity variables; When a tax is placed on a product, a change in the market equilibrium is generated, since buyers pay more and sellers receive less.

Thus, a tax causes the supply curve to move up and the demand curve to move down.

In order to know how the tax burden is distributed, the incidence is measured through the elasticity of the supply and demand curve, which measures the sensitivity of the quantity, demanded or offered, of products before a price change.

When the supply curve is more elastic than the demand curve, the impact of the tax is stronger for consumers, as the prices paid by consumers increase more than the price that sellers receive decreases.

Answer

It can be concluded about the elasticity of demand and supply prices that <em>supply is more elastic than demand</em>

3 0
2 years ago
Identify the correct statement regarding an employee assistance program. Multiple Choice It involves hiring an arbitrator from o
Genrish500 [490]

Answer:

It is a system that supervisors can use to refer their employees for professional treatment when necessary.

Explanation:

The employee assistance program is the program that helps the employee to received the benefits for assist the manager to solve out the personal problems that occurs at the time of performing a job that directly impact your job performance in terms of health, mental, emotional behavior

Therefore the above represent the answer

5 0
2 years ago
A finance lease agreement calls for quarterly lease payments of $4,625 over a 15-year lease term, with the first payment on July
love history [14]

Answer:

The Lease amortization schedule is attached in pdf format with this answer please find.

Explanation:

Lease payments, includes the payment of interest and principal as well. The interest is calculated for the period opening balance of lease and the residual amount of lease payment and interest is settled against the lease amount.

Download pdf
3 0
2 years ago
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