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fiasKO [112]
3 years ago
13

On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 offering a 4% discoun

t. They had a 20 year term, a stated rate of interest of 7%, and an effective rate of interest of 7.389%. Assuming Residence uses the effective interest rate method, the carrying value of the bond liability on January 1, Year 1 is (round any necessary computations to the nearest whole dollar)(A) $3,499(B) $3,500(C) $3,547(D) $3,600
Business
1 answer:
KATRIN_1 [288]3 years ago
5 0

Answer:

caring value of bond liability is $48000

interest expense = $3547

annual coupon = 3500

amount of bond discount amortization is $47

Explanation:

given data

face value = $50,000

bonds issue =  96

discount = 4%

time = 20 year

interest = 7%

effective rate of interest = 7.389%

to find out

compound annual coupon

solution

we have given face value and discount 4 %

so issue price will be

issue price = 96% of face value

issue value = 96% × 50000 = $48000

and

interest expense is here by effective interest rate is

interest expense = 7.389% of $48000

interest expense = $3547

and

annual coupon is here

annual coupon is 7% of face value

annual coupon = 7% × 50000

annual coupon = 3500

and

amount of bond discount amortization is 3547 - 3500 = $47

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A manager's operation had sales this period of $89,775. last period sales were $85,500. So the manager's percentage sales increase for this period when compared to last period was 5% .

The percentage increase is the measure of the percentage change. The percentage increase is defined as the ratio of increased value to the original value and then multiplied by 100. Here the increased value can be calculated by taking the difference between the final value and the initial value. The formula to calculate increase is given by -

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Percentage Increase = [(89775-85500) ×100]/85500

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However, there is the probability that it could do so for some number of years.

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Answer:

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