Answer:
Entry for the repayment involve a Debit of Note Payable of $1,060 and a Credit of Cash of $1,060.
Explanation:
By January 30 , 2 months interest would have expired and the journal entries are as follows :
December 31
Interest expense $30 (debit)
Note Payable $30 (credit)
January 30
Interest expense $30 (debit)
Note Payable $30 (credit)
Thus the <em>repayment will be at the carrying cost </em>of the note payable as follows :
Note Payable $1,060 (debit)
Cash $1,060 (credit)
Conclusion :
Entry for the repayment involve a Debit of Note Payable of $1,060 and a credit of Cash of $1,060.
Answer:
2.361
Explanation:
Calculation to Find the value of the test statistic
Based on the given information let our:
p=0.25
x = 159
n = 540
Since our p is 0.25 the first step is to find q using this formula
q = 1 - p
Let plug in the formula
q = 1-0.25
q= 0.75
Second step is to find the psample using this formula
psample= x/n
Let plug in the formula
psample= 159/540
psample = 0.294
Last step is to find the value of the test statistic
Using this formula
z= (psample - p) / √(pq/n)
Let plug in the formula
z = (0.294 - 0.25) / √(0.25×0.75/540)
z=0.044/√(0.1875/540)
z=0.044/√(0.000347222222)
z=0.044/0.01863389
z=2.361
Therefore the value of the test statistic will be 2.361
Answer:
Total dollar return is $103.00
Explanation:
The total dollar return on the investment comprises of the increase in price as well as the annual coupon of 7.4% of face value received over the holding period of one year.
annual coupon=face value*coupon rate=$1000*7.4%=$74.00
increase in bond's price=$926-$897=$29.00
Total dollar return on investment=$74.00+$29.00
Total dollar return on investment=$103
Answer:
a. The percentage increase per year in the winner’s check over this period was 7,73%
b. The winners prize at 2046 will be $12,975,215,98
Explanation:
a.
\sqrt[(2016-1895)]{(1390000/170)}
\sqrt[121]{8176,47}
0.0772965
b.
FC=IC*(1+0,0773)^{30}
FC=1,390,000*(1+0,0773)^{30}
Answer: The default risk premium on corporate bonds is 1.55%.
The nominal rate of return on bonds can be expressed as a sum of the premiums on the many types risks associated with corporate bonds.
The nominal interest rate (r) formula is:
where
r is the nominal rate of interest
r* is the real interest rate
IP is the average inflation risk premium
DRP is default risk premium
MRP is the maturity risk premium and
LP is liquidity premium
Substituting the values we get
