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3 years ago

Which of the following choices concerning the recognition of interest income for corporate bondare CORRECT?

Business

1 answer:

kumpel [21]3 years ago

7 0

Answer:

The correct answers are letters "A", "B", and "C".

Explanation:

Corporate bonds are securities that firm issues to be sold to investors to raise funds that will be using to keep the company up and running. Investors profit from the interest rate dealt in the bond agreement or sometimes they obtain physical assets of the organization as collateral. If in the secondary market bonds are issued at a premium, the premium can be amortized or applied to the bond base but if the bonds were issued at a discount, discount bond rules take into place. The interest payment received thanks to the bonds are recorded in the gross income.

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Adam is a traveling salesperson for Peter Petri Plumbing Supply Corp. Adam has express authority to solicit orders from customer

Juliette [100K]

Answer:

Explanation:

Liability of Petri:

On all the purchases, if payment is made within 30days from delivery, Petri gave the authority of a 5% discount to Adam. Upon extension of credit to customers, no terms were given to Adam.

In the case under consideration, Adam explicitly gave a false representation of his authority to get more sales on his account and thus, Petri is NOT accountable to John on his terms with Adam.

Liability of John:

Being a customer to Petri, John has to discover the detailed terms on discount and other payment terms with Petri when he called Petri. John is also accountable to make clarifications whether Adam has the authority to give a 10% discount and making payment in three installments.

In the case under consideration, John has failed to find the exact details on whether Adam has the authority to give a 10% discount. Thus, he is accountable to make the payment of $9500 in 30days.

6 0

2 years ago

Knowledge Check 01 On January 1, Year 1, Abbott Company granted 92,000 stock options to certain executives. The options are exer

Westkost [7]

Answer:

$153,333

Explanation:

Calculation to determine What amount should Olympic recognize as compensation expense for 2016

Using this formula

Compensation expense =Total compensation/Vesting period

Let plug in the formula

Compensation expense=($5 x 92,000)/3 years

Compensation expense=$460,000/3 years

Compensation expense=$153,333

Therefore What amount should Olympic recognize as compensation expense for 2016 is $153,333

5 0

2 years ago

Leisure Industries manufactures custom-designed playground equipment for schools and city parks. Leisure expected to incur $ 62

inn [45]

Answer:

Price= $85263,6

Explanation:

We need to calculate the price paid by the City of Hamptonville for playground equipment.

We know the following information:

Direct material= $13000

Direct labor= 160hours*$22hour= $3520

Manufacturing overhead: it is assigned on labor hours.

We need to calculate the value of manufacturing overhead.

Labor hours presupuested= $41800/$22hour= 1900hours

$/hour of manufacturing overhead= $627000/1900hours= $330

Manufacturing overhead Job 309= 330*160hours= $52800

Manufacturing cost Job 309= direct material + direct labor + Manufacturing overhead= 13000 + 3520 + 52800= $69320

Price=69320*1.23= $85263,6

6 0

3 years ago

An investment project has annual cash inflows of $2,800, $3,700, $5,100, and $4,300, for the next four years, respectively. The

lubasha [3.4K]

Answer:

Discounted payback period = 1.89 years

Explanation:

If Initial cost is $5,200

Year Cash flow Present value Present value Discounted

at 11% Cumulative cash flow

0 -5,200 1 -5,200 -5,200

1 2,800 0.9009 2,523 -2,677

2 3,700 0.811 3,003 326

3 5,100 0.73126 3,729 4,055

4 4,300 0.6587 2,833 6,887

Discounted payback period = 1 + (2,667/3003)

=1.89 years

Working

PV= (1+i)^-n

i= 11%, n= respective years 0,1,2,3,4

6 0

2 years ago

The payment of accounts payable would

Tema [17]

Decrease assets, decrease liabilities. Accounts payable are what the business owes (liabilities). By paying off accounts payable, the liabilities are decreasing (they owe less) and the assets are also decreasing (because they use assets/cash to pay off the liabilities, so they have less now).

Hope that helps

3 0

2 years ago