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3 years ago

Identify the features of stocks and bonds

Business

1 answer:

ch4aika [34]3 years ago

3 0

Explanation:

How to "buy at wholesale, sell at retail" like financial institutions

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Tanner-UNF Corporation acquired as a long-term investment $170 million of 6% bonds, dated July 1, on July 1, 2013. Company manag

Neporo4naja [7]

Answer:

1) The Investment would be classified as Held-to-maturity securities

2) Journal Entries (in millions)

Debit Investment $170 Credit Bank $140 Credit Discount on investment $30

3) Debit Bank $5.1 Debit Discount on investment $0.5 Credit Interest Income $5.6

4) Debit Fair Value loss $20 Credit Investment $20

5) The investment will be reported at the fair value of $150,000

6) Debit Bank $120 Debit Discount on Investment $29.5 Loss on Investment $0.5 Credit Investment $150,000

Explanation:

Interest = investment * semiannual interest

6%/2 = 3%

8%/2 = 4%

Bank = $170,000,000*3% = $5,100,000

Interest income = $140,000,000*4%= $5,600,000

Fair Value $150

cost $170

Fair Value Loss = $20

4 0

2 years ago

Consider a 7-year bond with a 9% coupon and a yield to maturity of 12%. If interest rates remain constant, one year from now the

Llana [10]

Answer:

(C) Higher.

Explanation:

The computation of the present value in both the cases are as follows:

In the first case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 7

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $863.09

In the second case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 6

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $876.66

So as we can see that the price of the bond would increased

5 0

3 years ago

Paris Company had common stock of $350,000 and retained earnings of $490,000. London Inc. had common stock of $700,000 and retai

Ganezh [65]

Answer: D. $2870000

Explanation:

Consolidated Assets are the assets that a company owes whether directly or indirectly through a subsidiary which will then be shown on the consolidated balance sheet of the company.

From the information given, the amount of total consolidated net assets will be calculated as:

= ($34000 × 35) + $700,000 + $980,000

= $1,190,000 + $700,000 + $980,000

= $2,870,000

8 0

3 years ago

Prepare a statement of cash flows for MED Corporation. (Enter your answers in thousands. Amounts to be deducted should be indica

Allushta [10]

Answer:

Explanation:

Question

Prepare a statement of cash flows for MED Corporation. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.) Cash flow from Operating Activities $ Cash flow from Investing Activities $ Cash flow from Financing Activities $ Net Change in Cash and marketable securities $

4 0

2 years ago

Equipment was purchased for $51,000 on January 1, 2012. Freight charges amounted to $2,100 and there was a cost of $6,000 for bu

ELEN [110]

Answer: $20040

Explanation:

The amount of accumulated depreciation at December 31, 2013, will be calculated thus:

Cost = $51000 + $2100 + $6000 = $59100

Less: Salvage value = $9000

Depreciable cost = $50100

Annual depreciation will then be:

= $50100/5

= $10020

Accumulated depreciation at Dec 31,2013 will then be:

= $10020 × 2

= $20040

5 0

2 years ago