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oksano4ka [1.4K]
4 years ago
8

Adair Valley issued $20,000,000 of general obligation bonds to construct a multipurpose arena. These bonds will be serviced by a

tax on the revenue from events held in the arena and will mature in 2024. During 2018, Adair Valley budgeted $2,500,000 of tax revenues and $2,000,000 for interest on the bonds in its Debt Service Fund. Prepare the journal entries necessary to record (a) the budget and (b) the expenditure when the interest comes due for payment.
Business
1 answer:
Arlecino [84]4 years ago
7 0

Answer: Please see explanation column for answer.

Explanation:

a) Journal entry to record the budget

Account                                           Debit                     Credit

Estimated   Revenues         $2,500,000

Appropriation                                                        $2,000,000

Budget fund                                                           $500,000

Calculation    

Budget fund= Estimated Revenues-Appropriation   = $2,500,000- $2,000,000= $500,000

b) Journal entry to record the  the expenditure when the interest comes due for payment.

Account                                           Debit                     Credit

Expenditure Interest              $2,000,000

Matured Interest payable                                            $2,000,000

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LaTanya Corporation is planning to issue bonds with a face value of $107,000 and a coupon rate of 6 percent. The bonds mature in
Tomtit [17]

Answer:

A. $107,005

B. $119,842

C. $101,228

Explanation:

Computation for the issue (sale) price on January 1 of this year

a. Case A: Market interest rate (annual): 6 percent

Table value are based on:

n= 7

i= 6%

Cash Flow Table Value Amount Present Value

Par (maturity value) 0.6651 $107,000 $71,166

Interest (annuity) 5.5824 6,420 35,839

($107,000*6%=$6,420)

Issue Price 107,005

Therefore The Issue Price for Case A is $107,005

b. Case B: Market interest rate (annual): 4 percent

Table value are based on:

n= 7

i= 4%

Cash Flow Table Value Amount Present Value

Par (maturity value) 0.7599 107,000 81,309

Interest (annuity) 6.0021 6,420 38,533

Issue Price $119,842

Therefore the Issue Price for Case B is $119,842

c. Case C: Market interest rate (annual): 7 percent.

Table value are based on:

n= 7

i= 7%

Cash Flow Table Value Amount Present Value

Par (maturity value) 0.6227 107,000 66,629

Interest (annuity) 5.3893 6,420 34,599

Issue Price $101,228

Therefore The Issue Price for Case C is $101,228

6 0
3 years ago
4. Why is the customer service department of a company important?
svp [43]
Because sometimes the customer service department of a company is always right but then again sometimes they are wrong so just try to believe it and try to think they're right because you never know.

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6 0
3 years ago
Using the following information, determine the location quotient for Motor City: employment in motor vehicle manufacturing withi
ValentinkaMS [17]

Answer:

15.7

Explanation:

In this question we have the following information

Employment in Motor Vehicle manufacturing within city = 12643

Total employment in motor city = 560379

Total individual employment = 152750

Total employment = 106201232

We get the location quotient as

(12643/560379)/152750/106201232

0.02256/0.001438

= 15.69

This is approximately

15.7

Therefore the location quotient = 15.7

7 0
3 years ago
Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile re
BartSMP [9]

Answer:

38880

Explanation:

Budgeted sales -870 boxes

Each box requires 44 pounds of clay

Opening inventory of clay = 3900 pounds

Closing inventory of clay = 4500 pounds

Clay mix cost - $0.40

Labor rate = $12/hr

Monthly purchase = budgeted sales  + closing inventory - opening inventory

(870*44) + 3900 - 4500

38280 +4500 - 3900 = 38,880

7 0
3 years ago
On July 1, Wildhorse Co. purchases 560 shares of its $5 par value common stock for the treasury at a cash price of $10 per share
vodomira [7]

Answer:

Please see the journal entries for the two treasury stock transactions.

Explanation:

• Purchase of treasury stock

Treasury stock Dr $5,600

To Cash account Cr $5,600

(Being the purchase of treasury stock that is recorded)

For recording the above, treasury stock was debited because it increased the treasury while cash credited because it decreased the assets.

• Sale of treasury stock

Cash account Dr $4,070

To Treasury stock Cr $3,700

To paid in capital- treasury stock Cr $370

Explanation

° Purchase of treasury stock

Treasury stock

= 560 shares × $10 per share

= $5,600

° Sales of treasury stock

Cash receipt

= 370 shares × $11 per share

= $4,070

Treasury stock

= 370 shares × $10 per share

= $3,700

Paid in capital treasury stock

= 370 shares × ($11-$10)

= $370

4 0
3 years ago
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