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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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The short-run break-even price A) is the price at which the firm's current liabilities are paid off. B) is the price at which a
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Answer:

B. is the price at which a firm's total revenues equal total costs

Explanation:

The short run in economics is a period of time in which one factor of production is fixed and others are varied. In the short run, the market is not fully in equilibrium. Break even is the point in which the total cost used in the course of production is equal to the total revenue earned from the products produced. In a break even scenario, there is no profit and there is no loss. At this point, firms are making normal rate of return on money invested and are able to settle all cost of production.

8 0
3 years ago
The Weston Corporation is analyzing projects A, B, and C as possible investment opportunities. Each of these projects has a usef
melamori03 [73]

Answer:

D

Explanation:

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3 years ago
An interior decorator has moved his business from Los Angeles to St. Paul, Minnesota, because his spouse's company transferred h
kifflom [539]

Answer:

The correct answer is option a.

Explanation:

An interior decorator has moved his business from Los Angeles to St. Paul, Minnesota because his spouse's company transferred her to St. Paul.

The decorator is distressed because the customers in his target market have, in his words, "banal and bourgeois taste."

The customers in St. Paul have a different taste from the customers that he catered to in Los Angeles. The consumer tastes and preferences may differ from place to place according to the climatic conditions, social status, cultures, etc.

The problem with the decorator is that he does not understands that customer needs are not right or wrong, good or bad. It is not right or wrong if the customers in Minnesota have a different preference from customers in Los Angeles.

6 0
3 years ago
You own a $36,800 portfolio that is invested in Stocks A and B. The portfolio beta is equal to the market beta. Stock A has an e
madam [21]

Answer:

The answer is $13,558

Explanation:

βP = 1.0 = 1.48A+ [.72 × (1-A)]

A = .368421

Investment in Stock A = $36,800 × .368421 = $13,558

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3 years ago
Land held for possible plant expansion would be included as an operating asset when computing return on investment (ROI).
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Answer:

B. False

Explanation:

Land held for possible plant expansion would NOT be included as an operating asset when computing return on investment (ROI).

Return on investment (ROI) is used to measure the profitability of an investment. It helps to compare the gain or loss from an investment in relation to its cost.

Return on investment can be used to determine

1. Profitability of a stock investment,

2. Profitability of the purchase of a business investment

3. Profitability of a real estate business

ROI = Net return / cost of investment × 100

Net return= Final value of investment - initial value of the investment

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3 years ago
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