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
ad-work [718]
3 years ago
8

g Determine the price of the bonds issued on February 1, 2021. 2-a. Prepare amortization schedules that indicate Cromley’s effec

tive interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell’s effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell’s investment on February 1, 2021. 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2023.
Business
1 answer:
tangare [24]3 years ago
4 0

Answer:

The question is missing the first part:

On February 1, 2021, Cromley Motor Products issued 6% bonds, dated February 1, with a face amount of $65 million. The bonds mature on January 31, 2025 (4 years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $65,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31.

1. Determine the price of the bonds issued on February 1, 2021.

the market value of each bond:

  • PV of face value = $1,000 / (1 + 4%)⁸ = $730.69
  • PV of coupon payments = $30 x 6.7327 (PV annuity factor, 4%, 8 periods) = $201.98

market price per bond = $932.67

2-a. I used an excel spreadsheet since there is not enough room here: Cromley Motors PDF

2-b. Again I used an excel spreadsheet since there is not enough room here:

3. February 1, 2021, bonds issued at a discount

Dr Cash 60,623,550

Dr Discount on bonds payable 4,376,450

   Cr Bonds payable 65,000,000

4. Cromley's records:

July 31, 2021, first coupon payment

Dr Interest expense 2,424,942

    Cr Cash 1,950,000

    Cr Discount on bonds payable 474,942

January 31, 2022, second coupon payment

Dr Interest expense 2,443,940

    Cr Cash 1,950,000

    Cr Discount on bonds payable 493,940

July 31, 2022, third coupon payment

Dr Interest expense 2,463,697

    Cr Cash 1,950,000

    Cr Discount on bonds payable 513,697

January 31, 2023, fourth coupon payment

Dr Interest expense 2,484,245

    Cr Cash 1,950,000

    Cr Discount on bonds payable 534,245

Barnwell's records:

July 31, 2021, first coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 2,425

    Cr Interest revenue 475

January 31, 2022, second coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 494

    Cr Interest revenue 2,444

July 31, 2022, third coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 514

    Cr Interest revenue 2,464

January 31, 2023, fourth coupon payment

Dr Cash 1,950

Dr Discount on bonds payable 556

    Cr Interest revenue 2,484

Download pdf
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> pdf </span>
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> pdf </span>
You might be interested in
Angela has an annual contract with Stenbach Service Centre to provide property maintenance services; this includes lawn care, sn
timurjin [86]

Answer:

Angela and Stenbach Service Centre

Contract for Service and Contract of Service:

1. Angela has a contract for service.

2. Factors used to decide whether a contract is for service or of service:

a) Employment terms are slightly different from business contract terms.

b) Employees are paid Wages and Salaries, while contractors are paid fees.

c) Employees do not submit monthly invoices for payment, but contractors do.

d) Angela fills tax forms for herself and remits the taxes, so she is self-accounting with respect to her income taxes, unless withholding taxes like Sales taxes.  An employee's income tax is deducted from her salary before payment and the company remits the taxes to the IRS.

Explanation:

The agreement between Angela, a self-employed individual, and Stenbach Service Centre is a contract for service.   A contract of service is an employment contract between Stenbach Service Centre, the employer, and the Payables Supervisor, an employee, for example.  Essentially, Angela can be described as an outsourcer for services vendor or service provider to Stenbach Service Centre, an outsourcer of service company.  Angela is engaged for a fee to carry out property maintenance services, including lawn care, snow removal, and parking lot maintenance.  She is an independent contractor with Stenbach.  She does not need to work on any day and she can subcontract her work by hiring others to help her discharge the service.  An employee, like Chris, cannot hire another person to discharge his responsibilities and must work on designed days.

Another important difference is that Angela submits monthly invoices for actual work done.  An employee does not have to submit an invoice in order to be paid for work done.  Angela's invoices will not be of the same amount from one month to the other, unlike Chris' whose salary pay sheet may be static in amount from month to month.  

5 0
3 years ago
You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is t
Blababa [14]

Answer:

the opportunity cost of going to work on saturday is $32

Explanation:

The opportunity cost of going to work on saturday is as follows:

= Income earned on saturday - psychic cost

= 4 hours × $11 - ($2 × 4 hours)

= $44 - $8

= $32

hence, the opportunity cost of going to work on saturday is $32

8 0
2 years ago
If you case a car accident, which type of insurance will require you to pay the least out of pocket?
maria [59]
Uninsured motorists. Make sure you have it.
7 0
3 years ago
While _______ decisions will generally need to be processed via the ______ system in our brains in order for us to reach a good
Jet001 [13]

Answer:

Nonprogrammed; reflective; programmed; reactive

Explanation:

Programmed decisions can be regarded as decision which involves well understood criteria when making it,. nonprogrammed decisions on the other hand can be explained as decisions which are novel, they are decision that does not have clear guidelines when trying to reach solution. rules as well as guidelines can be set up for programmed decisions by Managers when known fact is available because this will enhance in reaching

decisions quickly. It should be noted that While non programmed decisions will generally need to be processed via the reflective system in our brains in order for us to reach a good decision, with programmed decisions, heuristics can allow decision-makers to switch to the quick, reactive system.

5 0
3 years ago
Tucker's Trucking is considering a project with a discounted payback period just equal to the project's life. The projections in
Vinil7 [7]

Answer:

Break-even quantity= 9520 units

Explanation:

Giving the following information:

The projections include a sales price of $39.

Variable costs per unit of $14.

Fixed costs of $238,000.

The operating cash flow is $24,300.

Break-even quantity= Fixed costs/contribution margin

Break-even quantity= 238000/(39-14)= 9520 units

4 0
3 years ago
Other questions:
  • Demarco and janine jackson have been married for 20 years and have four children who qualify as their dependents (damarcus, jani
    15·1 answer
  • On Aug. 6, D submitted an application for a $50,000 Life insurance policy and did not pay the initial premium. On Aug. 18, D wen
    10·1 answer
  • "What is the assessment of the external environment? What are the critical issues facing the business? Can the business execute
    7·1 answer
  • A pharmacist stocks only one particular brand of acetaminophen, a popular pain-relief drug. Even if his customers prefer other p
    8·1 answer
  • Which of the following is a tip for creating successful content for social​ media? A. Write formally to impress your audience. B
    15·2 answers
  • How do performance standards best promote ethical behavior?
    12·1 answer
  • You have just made your first $4,400 contribution to your retirement account. Assume you earn a return of 13 percent per year an
    9·1 answer
  • Jarrod's Meat Shop doubles as a butcher shop and a sandwich shop that sells to both individuals and a nearby hospital system. On
    14·1 answer
  • Can somebody please answer my question! <br><br> https://brainly.com/question/25800995
    12·2 answers
  • on december 1, bright company receives a 6% interest-bearing note from galvalume company to settle a $20,000 account receivable.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!