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allsm [11]
3 years ago
14

On January 1, Year 1, Weller Company issued bonds with a $260,000 face value, a stated rate of interest of 10.00%, and a 10-year

term to maturity. Weller uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 8.00%. Interest is paid annually on December 31. Assuming Weller issued the bonds for $280,640, what is the carrying value of the bonds on the December 31, Year 3?
Business
1 answer:
Luden [163]3 years ago
3 0

Answer:

The carrying value of the loan in year 3 is $269,119.18

Explanation:

The carrying of the bond in year 3 comprises the loan opening book value in year 3 plus interest calculated on the opening balance using the yield to maturity less the  coupon payment calculated as a percentage of face value as computed in the attached excel file.

You would notice that the carrying values in years 1, 2 and 3 are $277,091.20,$273,258.50  and $269,119.18

Kindly find attached.

Download xlsx
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The cost constraint suggests that, even when the cost of providing accounting information exceeds its benefit, the financial acc
Alekssandra [29.7K]

Answer:

False

Explanation:

The GAAP established that when the benefits of obtaining accounting information are lower than the costs of providing that information, the information should not be provided.

For example, sometimes there are very small differences in certain accounts that don't allow a balance sheet to be balanced. If the accounting error is very small, e.g. just a few hundred dollars, then it is not reasonable to have a whole audit team check all the financial statements again to determine what caused the error. An adjusting entry could be made to close the account balances.

Imagine you are an auditor that must check the physical inventory of a factory and some boxes containing supplies are misplaced. It might take you a whole day to count again all the supplies and materials, but is it worth it? If the supplies were really expensive, probably yes, but if they were cheap components, then probably no.

3 0
3 years ago
Steve Jack and Chelsy Stevens formed a partnership, dividing income as follows: Annual salary allowance to Stevens of $176,130.
denpristay [2]

Answer:

$45,440.00

Explanation:

Jack's interest on capital =5%*$90,000=$4,500.00

Stevens' interest on capital =5%*$111,000=$ 5,550.00  

Net income left to be shared in ratio 1:2 is the net income of $309,000 minus the total interest on capital of $10,050 i.e $4,500+$5,550 and salaries to Stevens

Net income left for sharing=$309,000-$10,050-$176,130=$ 122,820.00  

Jack's share of profit=1/3*$ 122,820.00   =$ 40,940.00    

Stevens' share of profits=2/3*$122,820.00  =$ 81,880.00  

Amount distributed to Jack=$4,500+$ 40,940=$45,440.00  

6 0
3 years ago
Daniel wanted to start his own small business. After spending his own money on marketing research, Daniel asked his friend Chase
Nuetrik [128]

Given that Daniel spent months writing a business plan, this goes to show that Daniel understands the steps needed to start a small business.

<h3>What is a business plan?</h3>

This is a plan that shows the details of a business company. The document shows the objectives that the company has.

This document also tells how the business plans to go about achieving all the goals that it has set for itself.

Read more on business plans here:brainly.com/question/25311149

6 0
2 years ago
The percentage of sales approach separates accounts on the pro forma income statement and balance sheet into those that change d
lukranit [14]

Answer:

Sales

Explanation:

Sales is defined as the activities which are related to the selling or the number of the services or goods that are sold in the given period of time or year.

The seller who finished or concluded the sales in relation to the acquisition or appropriation or in a direct interaction at the time of sale with the buyer.

Therefore, the percentage of the sales method, separates the accounts on the balance sheet and pro forma income statement into those which change directly with sales.

5 0
3 years ago
This year Army purchased $3,700 of equipment for use in her business. However, the machine was damaged in a traffic accident whi
Andreas93 [3]

Answer: Check explanation

Explanation:

a. Since Amy bought the equipment for $3700 and sold the equipment for $690, the amount that Amy can deduct for the loss of the equipment will be:

= $3700 - $690

= $3010

b. Here, the amount that Army can deduct for the loss of equipment will be the lesser of the amount Amy bought the equipment which is $3700 or the cost of the repair which is $1370.

Therefore, $1370 will be deducted.

c. After the accident, Army could not replace the equipment so she had the equipment repaired for $4,300. What amount can Army deduct for the loss of the equipment?

Here, the amount that Army can deduct for the loss of equipment will be the lesser of the amount Amy bought the equipment which is $3700 or the cost of the repair which is $4300.

Therefore, $4300 will be deducted.

4 0
3 years ago
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