1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
anygoal [31]
3 years ago
13

A company issues 5%, 12-year bonds with a face amount of $70,000 for $64,070 on January 1, 2021. The market interest rate for bo

nds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31.
Required:
Record the bond issue and first interest payment on June 30, 2021.
Business
1 answer:
KIM [24]3 years ago
7 0

Answer:

Date              Particular                                Debit         Credit

Jan 1, 2021    Cash                                      $64,700

                      Discount on bond payable  $5,930

                               Bond payable                                 $70,000

Jun 30,2021  Interest expense                   $3,882

                      Discount on bonds payable                  $2,132

                      Cash                                                          $1,750

Workings:

Semi annual interest payment = 70,000 x 5% x 6/12

= $1,750

Interest expense on June 30, 2021 = Carrying value of bonds x Market interest rate

= 64,700  x 6%

= $3,882

Discount on bonds payable amortized on June 30, 2021 = Interest expense - Interest payment

= 3,882 - 1,750

= $2,132

You might be interested in
Which spreadsheet function is used to conduct a logical test to see if the conditions of a given expression can be met? A. Round
Nataly [62]

D.IF Function (APEX VERIFIED)

6 0
3 years ago
Read 2 more answers
Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a
melomori [17]

Answer:

$7.5

Greater

Explanation:

Price elasticity of demand = percentage change in quantity demanded/ percentage change in price

0.2 = 10%/ percentage change in price

percentage change in quantity demanded = 50% = 0.5

0.5 = (New price - $5) / $5

New price = (5 × 0.5) + 5 = $7.5

In the short run, demand is relatively inelastic because consumers need time to find suitable substitutes but in the long run, demand is usually more elastic.

I hope my answer helps you

5 0
3 years ago
Which of the following is a good time management technique
Sauron [17]
A. Knowing how to prioritize
4 0
3 years ago
Read 2 more answers
Income Statement The revenues and expenses of Paradise Travel Service for the year ended May 31, 2018, follow: Fees earned $900,
Virty [35]

Answer:

Net income is $135,00 from the income statement.

Explanation:

In the Income Statement for a particular year, all expenses all expenses for the year are deducted from the income to arrive at net income for that year. Based this, we have:

Paradise Travel Service Income Statement For the Year Ended May 31, 2018

<u>Details                                         ($)   </u>

Fees earned                          900,000

Office expense                    (300,000)

Miscellaneous expense         (15,000)

Wages expense                  <u> (450,000) </u>

Net income                          <u>  135,000 </u>

Therefore, net income is $135,00 from the income statement.

6 0
3 years ago
Franklin Corporation issues $50,000, 10%, 5-year bonds on January 1, for $52,100. Interest is paid semiannually on January 1 and
Karo-lina-s [1.5K]

Answer:

Bond interest expense = $2,290

so correct option is b. $2,290

Explanation:

given data

Bond issued = $50,000

Interest rate  = 10%

interest semi-annually = 5%

time period = 5 year

to find out

amount of bond interest expense

solution

we get first Cash interest payment that is here

Cash interest payment = $50,000 × 5%

Cash interest payment = $2,500     ....................1

and Bond premium will be

Bond premium = $52,100 – $50,000

Bond premium = $2,100      .......................2

we know interest paid semi annually so time period will be  = 10

so Amortization of bond premium will be here as

Amortization of bond premium = \frac{2100}{10}

Amortization of bond premium = $210      .................3

so  Bond interest expense will be calculate as

Bond interest expense = Cash interest payment - Amortization of bond premium     .......................4

put here value

Bond interest expense = $2,500 - $210

Bond interest expense = $2,290

so correct option is b. $2,290

8 0
3 years ago
Other questions:
  • A company manufactures 1,200 cylinders per day, each requiring a pressure gauge. The purchase price of the pressure gauge is $3.
    13·2 answers
  • Suppose you have won a free ticket to see a Bruce Springsteen concert. This ticket has no resale value. Also suppose that U2 has
    8·1 answer
  • Some​ governments, particularly in developing and emerging​ markets, are attempting to reduce losses that can occur when interna
    13·1 answer
  • Companies may have several reasons for creating joint ventures. Which of the following statements is one reason why firms may de
    13·1 answer
  • In 2018, Rachel received a $1,900 refund of state income taxes that she paid in 2017. In 2017, Rachel claimed itemized deduction
    7·1 answer
  • A company that treats its resources, products, and people as transcending national boundaries is____ company, and it will hire a
    5·1 answer
  • Tetra Co. uses the perpetual inventory system and a FIFO cost flow method. On January 1, the company purchased 2,000 units of in
    9·2 answers
  • Economic Condition
    11·2 answers
  • Economists would describe the u.s. automobile industry as
    7·2 answers
  • A rise in wages could be due to:
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!