Answer:
Commercial banks, required reserve, loans, deposits, create.
Explanation:
The main function of commercial banks is to accept deposits and then to lend the same money (minus required reserves) back out. Banks make a profit by charging a higher interest rate on loans than the interest rate they pay on deposits. Through the loan process, banks are actually able to create money.
The major function of commercial banks is
1. Accepting deposits from people and business organzations.
2. Giving loans to Customers to be paid at a specific period of time at an agreed interest rate.
Required reserve is the minimum amount of money which in required for a commercial Bank to hold/save out of every deposit. If the required reserve is 10% of every deposit, a customer customer deposited $100. The required will be $10 which the bank will hold. The remaining $90 is the balance which banks can loan out to Customers.
Commercial Banks make profit by charging a higher interest rate on loan and lower interest rate on deposits. For example: 7.5% interest rate on loan and 2.5% interest rate on deposits. The 5% difference is the bank Profit.
Answer:
Dr Interest expense $33,500
Cr Discount on bonds payable $1,100
Cr Cash $32,400
Explanation:
Discount on bonds payable=$540,000-$529,000=$11,000
Amortization of discount=discount on bonds issue/period of the bond
period to maturity of the bond is 5 years *2 =10 since the bond pays interest semi-annually
Amortization =$11,000/10=$1,100
Semi-annual interest=$540,000*12%/2=$32,400
the bond semi-annual interest expense=discount amortization+interest payment
the bond semi-annual interest expense=$32,400+$1,100=$33,500
Answer:
e. $153,156
Explanation:
From 9/1/14, he needs $50,000 every year for 4 years to fund the tuition fees. Therefore, present value of the amount needed at 9/1/14 using the Present value of annuity due formula
= 50,000 * {1+ (1/(1.05)^4) } / 0.05 * (1.05)
= $186,162
$186,162 is the amount needed after 4 years. Amount you need to invest today to have this amount in four years = $186,162/(1.05)^4 = $186,162/1.21550625 = $153,156.40
No. of shares outstanding before stock dividend = 634000
Price per share = $46
Stock dividend issued (shares issued) = 634000 x 13%
= 82,420
Value of stocks issued as stock dividend = 82420 x $46 = $3,791,320
No. of shares outstanding after stock dividend = 634,000 +82,420
=716420
Cash dividend = 716420 x 0.60
= 429,852
Total reduction in retained earnings = total value of dividend issued
= $3,791,320 + $429,852
= $4,221,172
Answer:
why do you even care about doing your homework i donk care about school thats why i have all fs
Explanation:
