Answer:
Following are the journal entries to this question:
Explanation:
Date account title Dr. Cr.
Mar.2 Incorporation expense
Common Stock (Par value
)
Paid in excess of par- Common Stock
(Bein 5000 common shares Of par value
each issued )
June. 12 Cash
Common Stock (Par value
)
Paid in excess of par- common stock
(Being 63400 common shares of par value
each issued for
cash)
July-11 cash
Preferred Stock (Par value
)
Paid in excess of par- Preferred stock
(Being 2175 Prefered shares of par value
each issued for
each)
Nov. 28 Treasury Stock
cash
(Purchased 2,350 shares of treasury stock for
).
Answer:
1 and a half months worth of depreciation
Explanation:
The advantage of starting to depreciate an asset purchased on December is that next year you will be able to depreciate it for a full year under MACRS. Generally, when you purchase an asset, you have to use the half year convention and your depreciation expense for the first year will be low compared to the second year. But if you start depreciating your asset in the current year, even if you purchased it on December and the depreciation expense is not that significant, the next year you will be able to depreciate it at the second year rate.
Answer:
a) Zero coupon bond does not pay periodical interest and formula to compute the value of a zero-coupon bond:
Value = Face Value / (1 +Yield / 2) ** Years to Maturity * 2
b) Interest deduction
After 1 year bond value from the above equation is 437.08
437.08 - 411.99 = 25.09
In the 14th year bond value from the above equation is 942.60
1000 - 942.60 = 57.40
c) Straight Line Method
Total Interest Paid = 1000 - 411.99
= 588.01
For yearly calculation
588.01 / 15 = 39.21
Further computation is done in the image below.