Answer:
Explanation:
as the discount rate gets larger, the price of the bond will decrease. as the coupon rate increases, the bond price will increase. bond prices are calculated by taking the present value of the coupons and face value of bonds. If the coupons are larger, the present value of the coupons will also be larger.
Answer:
True
Explanation:
Now the initial jounal entry of the Unearned Fees was recorded as:
Dr Cash received XX
Cr Unearned Fees XX ........... Is a liability
Now the reason why the statement is true can be best explained from the following equation:
Equity = Ordinary Stock + (Revenue - Expense - Dividend)
Now just look at the above equation and the journal entry, the unearned fees increased the liability and if this amount is not waived off to the amount the unearned fees are converted to earnings, I mean if you have received the amount for 3 months services in advance and only one month services are delivered then the 1/3 part of the unearned fees will recognized as earned. If it is not complied then we can see in the above equation that the revenue would decrease and this decrease will decrease the equity.
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