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blagie [28]
3 years ago
11

On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rat

e is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the first interest payment using straight-line amortization is:
Business
1 answer:
Ivahew [28]3 years ago
4 0

Answer:

Debit interest expense - - - - $15,351.72

Credit cash - - - - - - - $14,000

Discount payable on bond - - - - - $1,351.72

Explanation:

Parker value =$400,000

contract rate = 7% = 0.07

Market rate = 8%

Discounted bond = $383,793

First interest payment using straight lime amortization;

Debit interest expense :

8% of $383,793

0.08 × $383,793 = $30,703.44

$30,703.44 ÷ 2 = $15,351.72(semi annually)

Credit cash;

7% of $400,000

0.07 × $400,000 = $28,000

$28,000÷2 = $14,000(semi annually)

Discount on bond payable ;

Debit interest expense - Credit cash

$15,351.72 - $14,000 =$1,351.72= Discount amortization

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Answer:

A. Reversals entry

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B.

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3. Dr Accounts payable 360

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Explanation:

A. To Correct the errors by reversing the incorrect entry and Preparation of the correct entry.

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a. a marketing firm is looking for a candidate with a business degree and at least five years of work experience. multiple choic
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A. A marketing company is seeking an applicant with a business degree and at least five years of professional experience. An intersection.

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11 months ago
Employee involvement and participation​ (eip) management is a method of management where​ ________.
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It's a method where <span>subordinates share a significant degree of decision-making power with their immediate superiors
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Answer:

WACC 10.38305%

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D  2,360

E  1,540

RE 2000

V  5,900

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Kre 0.12

RE Weight  0,338983  (2,000,000 / 5,900,000)

Kd 0.1

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t 0.4

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WACC 10.38305%

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Answer:

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