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3 years ago

The balance in Discount on Bonds Payable

Business

1 answer:

Colt1911 [192]3 years ago

6 0

Answer:

b. would be subtracted from the related bonds payable on the balance sheet.

Explanation:

A bond is a fixed income instrument that represents the indebtedness of the borrower to the investor or creditor (bond issuer). They're basically loans that are given to large organizations or government.

This ultimately implies that, when an investor or creditor purchases a bond, an agreed amount of money is being borrowed to the issuer as a loan. Consequently, the bond issuer is expected to pay an interest with a return of principal at maturity to the holder (investor or creditor) of the bond.

Hence, bonds payable only arises when a company issues bonds so as to generate cash for its business and plans. Thus, the company is a borrower as the bond issuer while the holder of the bond is a debt-holder (investor or creditor). This further would mean that, the company becomes liable to the investor. Therefore, bonds payable should be recorded on the long-term liability side of the balance sheet being used by the company.

Bonds are issued at par or premium or discount and as such bond issuer records the face value of the bond as bonds payable.

<em>Additionally, the balance in discount on bonds payable would be subtracted from the related bonds payable on the balance sheet because it decreases the value of the bonds. </em>

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Problems and Applications Q8 Suppose subway ridership in New York City declined by 4.3 percent after a fare increase of 25 cents

lana66690 [7]

Answer:

Price elasticity of demand = Percentage in quantity demanded / Percentage change in price

We already have the percentage change in quantity demanded as -4.3%.

We need to find the percentage change in price using the midpoint method.

= (New price - Old price) ÷ ((New Price + Old price) / 2)

Old price = 1.50 - 0.25 = $1.25

Percentage change in price = (1.50 - 1.25) ÷ ((1.50 + 1.25) / 2)

= 18.18%

Price elasticity of demand = -4.3% / 18.18%

= -0.24

According to your estimate, the Transit Authority's revenue rises when the fare increases.<u> TRUE. </u>

The statement is true because the price elasticity of demand here is Inelastic and when this is the case, revenue rises when the price of the good or service increases.

The price elasticity of demand is inelastic when it is less than 1 which is the case here.

8 0

3 years ago

What is the role of the three questions of economics?

mr_godi [17]

Answer: is to act as the basic principle of production decision making. "What to produce", "How to produce", and "For whom it should be produced" are the three basic questions of economics

Explanation:

4 0

3 years ago

You have noticed that paying higher wages attracts more productive employees. However, you are concerned that there may be a lim

Sav [38]

Answer:

The level of wages that maximize tge profit is $61.257

And the correspond value for the profit is:

$p(61.257)=50(61.257)-0.5(61.257)^2 + .001(61.257)^3 + 200=1616.502$

Explanation:

For this case we have the following function:

$p(x)= 50x -0.5x^2 +0.001x^3 +200$

Where x represent the daily wages paid $0 \leq x \leq 500$ , and p(x) the profit, the objective is maximize this function, and in order to do this the first step is derivate the function respect to x and we got this:

$\frac{dp}{dx}=50-x+0.003x^2$

As we can see we have a quadratic equation now we need to set up equal the derivate obtained to 0 and then solve for the critical points, like this:

$\frac{dp}{dx}=0.003x^2 -x +50 =0$

We can use the quadratic formula given by:

$x =\frac{-b \pm \sqrt{b^2 -4ac}}{2a}$

And for this case a=0.003 , b=-1 , c =50

Replacing this we got :

$x =\frac{-(-1) \pm \sqrt{(-1)^2 -4(0.003)(50)}}{2(0.003)}$

$x = \frac{1 \pm \frac{\sqrt{10}}{5}}{0.006}$

And we got:

$x_1 =61.257 , x_2= 272.076$

Now we need to find the second derivate, like this:

$\frac{d^2p}{dx^2}=0.006x-1$

And we can replace the values obtained:

$0.006(61.257)-1 =-0.632$

So then 61.257 is a maximum.

$0.006(272.076)-1 =0.632 >0$

So then 272.076 is a minimum.

So then the level of wages that maximize tge profit is $61.257

And the correspond value for the profit is:

$p(61.257)=50(61.257)-0.5(61.257)^2 + .001(61.257)^3 + 200=1616.502$

4 0

3 years ago

Crane Corp. financed the purchase of a machine by making payments of $30500 at the end of each of five years. The appropriate ra

boyakko [2]

Answer:

$128,477

Explanation:

Given that

Payment to finance for purchasing the machine = $30,500

Rate of interest = 6%

Future value of one for five periods at 6% is 1.33823

The future value of an ordinary annuity for five periods at 6% is 5.63709.

The present value of an ordinary annuity for five periods at 6% is 4.21236.

So by considering the above information, the cost of the machine is

= Payment to finance for purchasing the machine × present value of an ordinary annuity for five periods at 6%

= $30,500 × 4.21236

= $128,477

6 0

3 years ago

Under FINRA rules, to recommend a direct participation program to a customer, the registered representative must ascertain that

mylen [45]

Answer:

has a fair market net worth sufficient to sustain the risks of the program.

Explanation:

FINRA is an acronym for Financial Industry Regulatory Authority. It is a non-profit agency in the United States of America, which is saddled with the responsibility of handling the licensing and regulation of broker-dealers in securities.

A direct participation program (DPP) can be defined as a financial security which gives an investor (customer) access to the cash flow and tax benefits of a business venture.

Under FINRA rules, to recommend a direct participation program (DPP) to a customer, the registered representative must ascertain and ensure that the customer has a fair market net worth that is considered to be sufficient to sustain the risks associated with the program, including loss of investment and lack of liquidity.

5 0

3 years ago