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sp2606 [1]
3 years ago
10

Canglon, Inc., issues 10%, 5-year bonds with a face value of $150,000 when the effective rate is 12%. Interest is to be paid sem

iannually on June 30 and December 31. Assume Canglon uses the effective interest method to amortize the discount. Prepare calculations to prove that the selling price of the bonds is $138,959.90.
Business
2 answers:
Strike441 [17]3 years ago
8 0

Answer:

$ 138961

Explanation:

Bonds value= $150,000

Time of the bonds= 5 years

Interest are paid semi annually, hence 5 years of which payment are paid twice in a year= 10 payment in total

Interest rate of bonds= 10% (meaning 5% per payment)

Effective of bonds= 12% (meaning 6% per payment)

Actual interest to be paid

150,000 x 5/100 = 7500

To get the present value, we will use the effective rate of 6%

-Present value of Bonds of face value $150000 = 150000 x 0.5584= $83,761

-Present value of interest of $ 45000 = 7500 x 7.3601= $55,200

Total present value of bonds

=$ 83760 + $ 55200= $ 138961

The bond is a debt security, under which the issuer owes the holders a debt and (depending on the terms of the bond) is obliged to pay them interest (the coupon) or to repay the principal at a later date, termed the maturity date.

Dmitry_Shevchenko [17]3 years ago
7 0

Answer:

Explanation:

Base on the scenario been described in the question, the calculation is done using this method

Particulars

Present value of principal

Add: present value of interest

Selling prices of bonds

Amount (A)

$150,000

$7,500

Present value factor (B)

O.558395

7.360087

Value of the bonds (A × B)

$83,759.25

$55,200.65

$138,959.90

Bond is said to be the long term promissory notes issued by company as the the lend money from investors to raise money that will be use in financing their operations.

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Carla Vista Company reports the following operating results for the month of August: sales $385,000 (units 5,500), variable cost
Neko [114]

Answer and Explanation:

The computation is shown below:

1.  

Selling Price = Sales ÷  Units Sold

Current Selling Price = $385,000 ÷  5500

= $70

Now

Expected Selling Price per unit = $70 + ($70× 10%)

= $77

Now

Expected Sales = 5500 × $77

= $423,500

Now

Net Income = Sales - Variable Cost - Fixed Cost

= $423,500 - $250,000 - $94,000  

2.  

Sales = $385000

Variable cost = $385,000 × 56% = $215,600

Sales                     $385,000

Less: variable cost -$215,600

Contribution Margin $169,400

Les: fixed cost          -$94,000

Net Income               $75,400

As we can see that if there is an increase in Selling Price by 10% so it would produce highest Net Income.

3 0
3 years ago
analyze how a person's ethics or values might affect his performance on the job. Can someone help me or give me a few example?
Vilka [71]
The data shows that: 78% of White people were employed in 2019, compared with 66% of people from all other ethnic groups combined. the difference in the employment rates for White people and those from all other ethnic groups combined went down from 16pp in 2004 to 11pp in 2019.
6 0
3 years ago
Leesburg sold a machine for $2,200 on november 10th of the current year. the machine was purchased for $2,600. leesburg had take
taurus [48]
The original price of the machine is $2,600 but it has a depreciation value now of $1,200.

*original price - depreciation value = machine's existing value*
$2,600 - $1,200 = $1,400

However, they've sold the machine for $2,200 instead of 1,400 (which is supposedly the existing price). So, they've gain $800 ($2,200 deducted by $1,400) out from this transaction. 
7 0
3 years ago
The Digby Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. The expec
Igoryamba

Answer:

$4,908,000

Explanation:

The computation of accumulated depreciation expense for this purchase is shown below:-

Depreciation expense = ((Cost of machine - Salvage) ÷ Estimated useful life of machine)

= (($40,900,000 - $4,090,000) ÷ 15) × 2

= $36,810,000 ÷ 15 × 2

= $4,908,000

Therefore for computing the depreciation expense we simply applied the above formula.

6 0
3 years ago
Leaders have the duty and responsibility to plan in advance for all foreseeable situations and circumstances for all activities.
iren [92.7K]

Answer:

True

Explanation:

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8 0
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