Answer:
(a) Journalize the payment of the bond interest on January 1, 2022.
Dr Interest payable - bonds payable 40,400
Cr Cash 40,400
The interest expense on the bonds payable should have been accrued on the 2021 balance sheet, that is why we debit interest payable and not interest expense.
(b) Assume that on January 1, 2022, after paying interest, Blossom calls bonds having a face value of $100,000. The call price is 103. Record the redemption of the bonds.
Dr Bonds payable 100,000
Dr Call premium 3,000
Cr Cash 103,000
(c) Prepare the adjusting entry on December 31, 2022, to accrue the interest on the remaining bonds.
interest expense = $405,000 x 8% = $32,400
Dr Interest expense - bonds payable 32,400
Cr Interest payable - bonds payable 32,400
It pretty much means it divides the task
The correct answer is false.
It is false that the slope of the investment demand function indicates how sensitive investment is to changes in real interest rates. The 'steeper' the investment demand function, the less sensitive investment is to changes in the real rate of interest, all else constant.
We can say that the downward slope is the consequence of several reasons. For instance, the concept that money, its nominal value, is fixed. However, the real value of money depends on the level of prices. So the demand for money is related to the demand for it. The interest rate falls when the price level falls.
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It is reported as foot notes in cashflow statement or in the notes of financial statements.
When an income statement is converted to cash flows from operational operations, noncash items like as depreciation and nonoperating profits and losses are not included. Non-cash investing and financing entails making an investment or purchase using financial instruments other than cash.
The Generally Accepted Accounting Principles (GAAP) are a collection of generally observed financial reporting accounting standards and regulations. The four main constraints of GAAP are objectivity, the materiality, the consistency, and the prudence.
Companies are required by both IFRS and US GAAP to declare any substantial non-cash investment and financing operations, either as a footnote at the bottom of the statement of the cash flows or in notes to the financial statements.
Therefore, the answer is the bottom of the statement of the cash flows or in the notes to financial statements.
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