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Greeley [361]
3 years ago
13

lue Inc. has decided to raise additional capital by issuing $171,000 face value of bonds with a coupon rate of 11%. In discussio

ns with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $115,200, and the value of the warrants in the market is $28,800. The bonds sold in the market at issuance for $140,000. Prepare the journal entry
Business
1 answer:
Dafna1 [17]3 years ago
5 0

Answer:

Explanation:

Value assigned to bonds =

Value of bonds without warrants/(value of bonds without warrants+value of warrants)*Issue price

Value assigned to warrants =

Value of warrants/(value of bonds without warrants+Value of warrants)

Value assigned to bonds = 115,200/(115,200+28,800) * 140,000 = 0.8*140,000 = 112,000

Value assigned to warrants = 28,800/144,000 * 140,000 = 28,000

Journal entries:

Dr Cash 140,000

Dr Discount on bonds payable (171,000-112,000) 59,000

Cr Bonds payable 171,000

Cr Paid in capital-Stock warrants 28,000

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What is the amount of interest earned after two years on a $100 deposit paying 4 percent simple interest annually?
klasskru [66]

Answer:

$8

Explanation:

The yearly amount of interest earned on a $100 deposit at 4 percent rate is:

Ai=$100*0.04\\Ai=\$4

Since simple interest investments yield a constant interest each year, the amount earned after two years is:

I=2*\$4\\I=\$8

The total amount earned is $8.

7 0
3 years ago
Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated four-year life and a $2,400 s
maria [59]

Answer:

1. Book value at end of year 2 = $13,130

2. Depreciation from year 3 for last 3 years = $3,710 each year, that is $11,130 for three years.

Explanation:

As for the provided details, we have:

Cost of machinery = $23,860

Expected life = 4 years

Salvage value = $2,400

Straight line depreciation = \frac{23,860 - 2,400}{4} = 5,365

Under straight line method depreciation remains constant for life of asset.

Book value at end of year 2 = $23,860 - ($5,365 \times 2) = $13,130

Thereafter in the beginning of year 3 the estimate is made to realize that the total remaining life expected is 3 years, with salvage value $2,000

Thus, depreciation from year 3 = \frac{13,130 - 2,000}{3} = 3,710

Therefore, depreciation from year 3 to year 5 = $3,710 each year.

Total depreciation of last 3 years = $3,710 \times 3 = $11,130

3 0
3 years ago
Suppose in the short run a firm’s production function is given by Q = L 1 2 K 1 2 and that K is fixed at K = 10. If the price of
Furkat [3]

The firm’s marginal cost of production when the firm is producing 50 units of output is 33.33

Solution:

The production function is Q = \sqrt{L * K}

The initial value is 10 units. The production value is 50 units The manufacturing cycle needs work as stated below.

Q = \sqrt{L * K}

Q = \sqrt{L * 10}

L = (\frac{Q}{3.162} )^{2}

The wage rate is $15 . The following is the expense of the manufacturing process.

TC = P_{L} * L + P_{K} * K

TC = ( 15 * (\frac{Q}{3.162} )^{2} ) + [ P_{k * 10}]

The marginal production cost is really the increase in manufacturing costs as output increases by 1 point.

As listed below, the marginal cost:

TC = ( 15 * (\frac{Q}{3.162} )^{2} ) + [ P_{k * 10}]

MC = \frac{TC}{Q} = \frac{2Q}{3}

MC = \frac{2*50}{3} = 33.33

6 0
3 years ago
Problem:Water flows from a bathroom tap at a rate of 2 gallons every 6 seconds. Questions At this rate,how many minutes will it
katrin2010 [14]

Answer:

4 minutes.

Explanation:

The rate of flow from the tap is 2 gallons every six second

which comes out to be 1 gallons per 3 seconds.

so for 80 gallons we can simply

3  * 80 = 240 which is 240 seconds.

Thus it would take 4 minutes to fill up the 80 gallon tub.

4 0
3 years ago
At a sales volume of 30,000 units, Carne Company's total fixed costs are $30,000 and total variable costs are $45,000. The relev
Anna [14]

Answer:

$2.25

Explanation:

sale volume of company = 30,000 unit

total fixed cost are = $30,000

total variable cost $45,000 for 30,000 unit

1 unit = 45000/30000 =  $ 1 . 5

for the sale of 40,000 unit

the  total expected cost

    = Fixed cost + Variable cost

      = $30,000 + 40,000×$1.50

      = $30,000+$60,000

     = $90,000

Cost per unit:

 = $90,000/40,000

=  $2.25

8 0
3 years ago
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