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Novosadov [1.4K]
3 years ago
10

Suppose that a Treasury coupon security is purchased on April 8 and that the last coupon payment was on February 15. Assume that

the year in which this security is purchased is not a leap year.
---Answer the following questions.
(b) If the coupon rate for this Treasury security is 7% and the par value of the issue purchased is $1 million, what is the accrued interest?
Business
1 answer:
arsen [322]3 years ago
5 0

Answer:

Accrued Interest = 53 days x Daily interest of 191.78 = $10,164.34

Explanation:

Suppose that a Treasury coupon security is purchased on April 8 and that the last coupon payment was on February 15. Assume that the year in which this security is purchased is not a leap year.

If the coupon rate for this Treasury security is 7% and the par value of the issue purchased is $1 million, what is the accrued interest?

Interest per day = 0.07 x 1,000,000 / 365 =191.78

Feb 15 to Apr 8 = 53 days

Accrued Interest = 53 days x Daily interest of 191.78 = $10,164.34

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Explanation:

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Assume that on January 1, 2019, after paying interest, Colaw Company calls bonds having a face value of $1,200,000. The call pri
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Answer:

Journal entry

Explanation:

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The following is taken from the Colaw Company balance sheet. line premisam amortization, COLAW COMPANY Balance Sheet (partial) December 31, 2017 and redemption of bonds LO 5) Current liabilities Interest payable (for 12 months from January 1 to December 31) 210,000 Long-term liabilities Bonds payable, 7% due January 1, 2028 Add: Premium on bonds payable $3,000,000 200,000 3,200,000 682 15 Long-Term Liabilities Interest is payable annually on January 1. The bonds are callable on any annual interest date. Colaw uses straight-line amortization for any bond premium or discount. From December 31, 2017, the bonds will be outstanding for an additional 10 years (120 months).

The journal entry is as follows

Bond payable $1,200,000

Premium on bond payable $72,000

              To Cash $1,212,000     ($1,200,000 × 101%)

               To Gain on redemption of bonds $60,000

(Being the redemption of the bond is recorded)

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= $72,000

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4 0
3 years ago
Tyler Hawes and Piper Albright formed a partnership, investing $210,000 and $70,000, respectively. Determine their participation
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Answer:

No agreement concerning division of net income.

Hawes = $52,000

Albright = $52,000

Divided in the ratio of original capital investment.

Hawes = (210/280) x $104,000 = $78,000

Albright = (70/280) x $104,000 = $26,000

Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.

Hawes = ($210,000 x 5%) + $36,000 = $46,500

Albright = ($70,000 x 5%) + $54,000 = $57,500

Salary allowances of $36,000 and $45,000, respectively, and the balance divided equally.

Hawes = $36,000 + $11,500 = $47,500

Albright = $45,000 + $11,500 = $56,500

Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally.

Hawes = ($210,000 x 5%) + $36,000 + $4,500 = $51,000

Albright = ($70,000 x 5%) + $45,000 + $4,500 = $53,000

3 0
3 years ago
Suppose Natasha currently makes $50,000 per year working as a manager at a cable TV company. For the soap making opportunity she
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Answer:

She should quit her job, become an entrepreneur and  choose the soap making for the highest profit/ income of $70,000

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The annual profit = $465,000- $395,000 = $70,000

Step 2: Calculate Natasha's annual profit if she should start the internet opportunity she anticipates

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3. Internet Opportunity= $25,000

Then she should quit her job, become an entrepreneur and  choose the soap making for the highest profit of $70,000

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