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german
3 years ago
5

Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the an

nual market rate for these bonds is 10%, which implies a selling price of 87 ½. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 87 ½, what are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date?
Business
1 answer:
vichka [17]3 years ago
5 0

Answer: 1. $218750 ; 2. $231, 250 ; 3. $11562.50

Explanation:

1. The bonds with a par value of $250,000 and implied selling price of 87 ½.

Cash proceed = 250,000 × 87.5%

= $218,750

2. Since it's semiannual interest payments, the total amount of bond interest expense that will be recognized over the life of these bonds will be:

[20 × (250,000 × 8% × 6/12)]+ $250,000 - $218,750

= $200,000 + $250,000 - $218,750

= $231, 250

3. The amount of bond interest expense recorded on the first interest payment date will be:

= Total bond interest expense/number of payments

= $231,250/20

= $11562.50

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Travka [436]

Answer:

Complementary goods

Explanation:

Complementary goods are goods that are demanded for together or consumed together. If the demand for one of the complementary goods increases, the demand for the other good increases and vice versa.

If the price of coffee increases by 10%, the demand for coffee and doughnut would fall according to the law of demand.

I hope my answer helps you.

8 0
3 years ago
A convenience store owner is contemplating putting a large neon sign over his store. It would cost​ $50,000, but is expected to
Radda [10]

Answer:  <em>No, since the value of the cash flows over the first two years are less than the initial investment</em>

Explanation:

value of cash flows for the first two years = $48,000 (24,000x2)

Initial Investment = $50000

Because the additional $48,000 profit during the two year payback is not grater than the $50,000 purchase, they should not put the large neon sign up.

4 0
3 years ago
Wage and price stickiness Select one: a. gives rise to a vertical long-run aggregate supply curve. b. gives rise to a vertical s
Tresset [83]

Answer:

d. prevents the economy from producing its potential level of real GDP.

Explanation:

Price-stickiness or Wage-stickiness, is a term that describes a condition in which a nominal price or wage is resistant to change. Often referred to as Nominal Rigidity, this occurs when a price or wage is fixed in nominal terms for a given period of time.

In other words, Price stickiness or Wage Stickiness occurs when workers' earnings or price don't adjust quickly to changes in labor market conditions, thereby creating sustained periods of shortage or surplus.

Hence, Price and Wage stickiness prevent the economy from achieving its natural level of employment and its potential output, which in turn prevents the economy from producing its potential level of real GDP.

5 0
3 years ago
The business was started when the company received $48,500 from the issue of common stock. Purchased equipment inventory of $176
masya89 [10]

Answer:

Total current liabilities  85.008,33‬

Explanation:

current liabilities: obligations that will setlte within a one-year period

<em />

<em>accounts payable</em> from the purchase of equipment:

cost:          176,500

paid:      <u>  (125,900)  </u>

balance:    50,600

<em />

<em>waranty liaiblity:</em>

191,000 x 5% = 9,550

<em>sales tax payable:</em>

sales for     191,000

paid for   <u>  (141,000)  </u>

unpaid for  50,000 x 6% = 3,000

<em>note payable</em> with a local bank:

principal:   21,500

accrued interest: 21,500 x 5% x 1/3 = 358,33

net:   21,858.33

<u>Total current liabilities:</u>

accounts payables 50,600

warrant liability:        9,550

sales tax payable:    3,000

note payable:     <u>    21,858.33   </u>

                             85.008,33‬

5 0
3 years ago
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velikii [3]
The answer that would best complete the given statement above would be the term CHILDREN. <span>The CAN-SPAM Act regulates the use of unsolicited ads that show mature content unsuitable for children. This is under the minor protection law. Hope this answers your question. Have a great day!</span>
8 0
3 years ago
Read 2 more answers
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