All categories

2 years ago

The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:

Business

1 answer:

drek231 [11]2 years ago

7 0

Answer:

1. The journal entry records are the following:

1-jul year 1 Debit Credit

Cash $63,532,267

discount on bonds payable $10,467,733

bonds payable $74,000,000

31-dec year 1 Debit Credit

Interest expense $4,331,693

discount on bonds payable $261,693

Cash $4,070,000

31-dec year 1 Debit Credit

Income Summary $4,331,693

Interest expense $4,331,693

30-jun year 2 Debit Credit

Interest expense $4,331,693

discount on bonds payable $261,693

Cash $4,070,000

31-dec year 2 Debit Credit

Interest expense $4,331,693

discount on bonds payable $261,693

Cash $4,070,000

Income Summary $8,663,386

Interest expense $8,663,386

30-jun year 3 Debit Credit

Bond payable $74,000,000

Loss on redemption $7,940,961

Cash $9,420,961

discount on bonds payable $72,520,000

2. a. The amount of the interest expense in Year 1 is $4,331,693

b. The amount of the interest expense in Year 2 is $8,663,386

3. The carrying amount of the bonds as of December 31, Year 2 is $64,317,346.

Explanation:

First, to journalize the entry record for 1-jul of year 1 we have to calculate the discount on bonds payable as follows:

discount on bonds payable=$74,000,000-$63,532,267=$10,467,733

1. Therefore, journal for entry record for 1-jul of year 1 is:

1-jul year 1 Debit Credit

Cash $63,532,267

discount on bonds payable $10,467,733

bonds payable $74,000,000

To journalize the entry record for 31 decl of year 1 we have to calculate the cash as follows:

Cash=$74,000,000×11%×1/2

Cash=$4,070,000

Therefore, journal for entry record for 31-dec of year 1 is:

31-dec year 1 Debit Credit

Interest expense $4,331,693

discount on bonds payable $261,693

Cash $4,070,000

31-dec year 1 Debit Credit

Income Summary $4,331,693

Interest expense $4,331,693

To journalize the entry record for 30 jun of year 2 we have to calculate the cash as follows:

Cash=$74,000,000×11%×1/2

Cash=$4,070,000

Therefore, journal for entry record for 30-jun of year 2 is:

30-jun year 2 Debit Credit

Interest expense $4,331,693

discount on bonds payable $261,693

Cash $4,070,000

journal for entry record for 31-dec of year 2 is:

31-dec year 2 Debit Credit

Interest expense $4,331,693

discount on bonds payable $261,693

Cash $4,070,000

31-dec year 2 Debit Credit

Income Summary $8,663,386

Interest expense $8,663,386

Journal for entry record for 30-jun of year 3 is:

30-jun year 3 Debit Credit

Bond payable $74,000,000

Loss on redemption $7,940,961

Cash $9,420,961

discount on bonds payable $72,520,000

a. The amount of the interest expense in Year 1 is $4,331,693

b. The amount of the interest expense in Year 2= interest expense on bonds payable June 30+interest expense on bonds payable Dec 31=$4,331,693+$4,331,693=$8,663,386

3. The carrying amount of the bonds as of December 31, Year 2=Issue price of bonds-discount amortized

Discount amortized=$9,420,961- $261,693=$9,682,654

The carrying amount of the bonds as of December 31, Year 2=$74,000,000-$9,682,654=$64,317,346

You might be interested in

Suppose that nondurable goods spending is $200 billion, durable goods spending is $400 billion, new residential housing spending

umka21 [38]

Answer:

$1,300 billion

Explanation:

total private consumption = nondurable goods spending + durable goods spending + spending on services = $200 billion + $400 billion + $700 billion = $1,300 billion

New residential housing spending ($500 billion) are considered residential investments, not part of private consumption.

6 0

2 years ago

When managers are engaged in problem solving, there are several steps they should go through in order to prevent themselves from

andrew-mc [135]

Answer:

a. Defining the problem, generating alternatives, selecting an alternative, implementing and evaluating the solution.

Explanation:

In order to solve a problem managers should follow logical steps to solve it correctly. First, the problem needs to be defined and all the possible ways in which the problem could be resolved should be listed. Then, the solutions should be analyzed to determine which one is the best one for the specific case. After that, it should be implemented properly and the last step will be to evaluate the solution to get feedback and determine if it fixed the problem or if another solution will need to be found to deal with it.

4 0

2 years ago

Meek's hunting emporium is a retail store that sells equipment required for hunting. it has established an advertising plan that

Maru [420]

The answer is; "this is an example of a media schedule".
A media schedule or plan assigns the medium or media to be utilized, the particular vehicles, and the inclusion dates of the promoting. It is utilized by advertisers to plan their promotions subsequent to picking the media for their advertising campaign.

5 0

2 years ago

Identify and explain the four primary types of taxes that businesses pay

DENIUS [597]

Answer

Hi,

They are; income tax, self-employment tax, employment tax and Excise tax

Explanation

All businesses are expected to file income tax return on yearly basis. Some pay taxes as they earn the income. The self-employment tax is imposed to contribute to social security and health care cover for a person who works for him or herself. Employment taxes are a mandatory to employers who are required to pay it to cover social security and healthcare taxes and federal unemployment tax for the workers. Some businesses are levied excise tax depending on the goods sold or manufactured, the type of business operation and the type of equipment and products used.

Best wishes!

3 0

3 years ago

Which of the following theories argues that organizations try to minimize their reliance on other organizations for the supply o

aleksklad [387]

Answer: The answer is C.

Explanation: The Resource dependence theory is based on the principle that organizations, must engage in transactions with other organizations in their environment in order to acquire the resources needed for their daily operations.

Although such transactions may be advantageous, they may also create dependencies that are not, and so organization A may want to rely less on organization B, in their quest to influence the environment to make resources available.

This theory actually originated in the 1970s with the publication of The External Control of Organizations: A Resource Dependence Perspective by Jeffrey Pfeffer and Gerald R. Salancik.

The theory is based on the idea that resources are vital for organisational success and that access and control over resources forms the basis of power.

4 0

2 years ago

Read 2 more answers