Answer:
1. $24,300
2. 12
3. the bond is trading at a discount.
4. $470,090.86
5. <u>Journal Entry</u>
Cash $470,090.86 (debit)
Bond Payable $470,090.86 (credit)
Explanation:
<u>1. seml-annual Interest payment</u>
Seml-annual Interest payment = ($540,000 × 9 %) ÷ 2
= $24,300
<u>2. Number of seml-annual Interest payment</u>
Number of seml-annual Interest payment = 6 years × 2
= 12
<u>3. Issue</u>
The annual market rate for the bonds (YTM) , 12% is greater than the coupon rate of the bond 9%.
The Price will be less than the par value and we say that the bond is trading at a discount.
<u>4. Computation of the Issue Price, PV</u>
PMT = $24,300
n = 12
YTM = 12 %
FV = $540,000
p/yr = 2
PV = ?
Using a Financial Calculator, the Issue Price, PV is $470,090.86
<u>5. Journal Entry</u>
Cash $470,090.86 (debit)
Bond Payable $470,090.86 (credit)
Answer:
The answers are:
- Cr Accounts receivable $4,000
- Dr $3,332 Cash
- Dr $68 Sales discount
- Dr $600 returned merchandise (damaged)
Explanation:
The credit terms of 2/10, n/30 means that if Hannah Company pays within ten days, they will get a 2% discount, or they have thirty days to pay the full receipt.
Hannah's check should be for:
($4,000 - $600) x 0.98% = $3,400 x 0.98% = $3,332
Arter Company should record the following entries:
Cr Accounts receivable $4,000
Dr $3,332 Cash
Dr $68 Sales discount
Dr $600 returned merchandise (damaged)
_
BLIND OBEDIENCE occurs when soldiers or employees follow questionable orders, such as when nurses willingly follow a physician's order to give a patient a dangerously high dosage of medication.
Answer:
$319,000
Explanation:
The computation of the liability is shown below:
= Total expenses in three year - actual warranty expenditure
where,
Total expenses in three years = Total sales × total percentage of sales
= $6,200,000 × 9%
= $558,000
And, the actual warranty expenditure is $239,000
Now put these values to the above formula
So, the value would equal to
= $558,000 - $239,000
= $319,000
Answer:
C. 25.5%
Explanation:
Net operating cashflow = (250,000 - 100,000) = 150,000; This is a recurring cashflow; the PMT
Cost of equipment; the PV = 400,000
Next, calculate the rate of return using Net operating cashflow per year and the equipment cost. You can do this with a financial calculator;
N =5
PMT = 150,000
FV = 0
PV = -400,000
then CPT I/Y = 25.41%
Therefore the return is closest to 25.5%
