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rjkz [21]
3 years ago
11

Sand, Inc. has outstanding $5,000,000, 10%, 20-year bonds. The bonds are callable at 104 on any interest date. The bonds were is

sued at par and mature in 10 years. Recently, interest rates have declined to 5% and the market price of the bonds has increased to 107. If the company exercises the call provision, the company will record:
A) A credit to cash of $5,350,000.
B) A loss of $200,000 on its income statement in the year the bonds are called.
C) A loss of $20,000 in the year the bonds are called and a $20,000 loss for the next 9 years.
D) A gain of $50,000 in the year the bonds are called.
Business
1 answer:
Ray Of Light [21]3 years ago
6 0

Answer: B) A loss of $200,000 on its income statement in the year the bonds are called.

Explanation:

The bonds were issued at Par. This means they were issued at 100 of par.

The bonds are now trading at 104 of par.

If Sand Inc calls the bonds then they will make a profit (loss) of,

= 5,000,000 * 104/100

= $5,200,000

Therefore their Profit (loss) will be the bond at par minus the Calling price

= 5,000,000 - 5,200,000

= -$200,000

That means they make a loss of $200,000 in the year the bonds are called.

If you need any clarification do react or comment.

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charle [14.2K]

The down payment that would be paid by reg is $2,800.

<h3 /><h3>What is a down payment?</h3>

A down payment is the first partial payment for the purchase of price expensive items or services, such as a car or a house. It is usually paid off in cash or equal at the time of finalizing the transaction. A loan of some kind is then asked to finance the remainder of the payment.

<u>Computation </u><u>of a down Payment:</u>

<u />

According to the question,

The total amount of car would be:

\text{List Price + Sales Tax + Registration Fee + Documentation Fee}\\\\\$22,499+\$1,791+\$2,138+\$262 = \$26,690.

r= 10.27%,

r=\dfrac{10.27}{12\times100}\\\\\\r= 0.00855833 ,

t= 12\times3\text{Years}=36 \text{Months}.

Monthly Payment = $773.89.

Let X be the amount of payment that is given in the starting.

\text{Monthly Payment} = \dfrac{\text{(List Price - x) r }}{1-(1+r)}}\\\\\\\$773.89 = \dfrac{(22,49-\text{x )0.0085533}}{1-(1+0.0085533)}\\\\\text{x}=$23889.84

The amount of down payment would be:

\text{Down Payment}=\text{Total Amount - Down Payment}\\\\\\\text{Down Payment}=\$26,690-\$23889.84\\\\\text{Down Payment}=\$2,801 \text{App.}

Hence, Option D is correct.

Learn more about the down payment, refer:

brainly.com/question/1114543

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5 0
2 years ago
These items are taken from the financial statements of Martin Corporation for 2017.
ella [17]

Answer:

Service revenue                                    68,000

Utilities expense                             2,000

Maintenance and repairs expense 1,800

Depreciation expense                    3,600

Insurance expense                         2,200

Salaries and wages expense       37,000

Total expenses                                <u>     (46,600)   </u>

Net Income                                             21,400

Retained earnings (beginning) $31,000

Net Income                                  21,400              

Dividends                                <u>   (12,000)   </u>

Ending Retained Earnings         40,400

Balance Sheet

Assets

current

Cash                           10,100

Accounts receivable  11,700

Prepaid insurance  <u>    3,500   </u>

total current              25,300

Non-Current

Equipment(net)         48,400

Total Assets:              73,700

Liabilities

Accounts payable                18,300

Salaries and wages payable 3,000

Total Liabilities                      21,300

Equity

Common stock           12,000

Retained Earings        40,400

Total Equity                 52,400

Total Liabilities + Equity        73,700

Explanation:

First, we do the income statmeent which is revenues less expenses accounts

Then, we do the retained earnings.

To the beginning balance we add up the net income and subtract the dividends.

Then, end with the blaance sheet:

first assets in order of liquity

then liabilities and last equity using the retained earnings balance we calcualted.

5 0
3 years ago
A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina cons
artcher [175]

Answer:

Martina

Javier :

Kama

Explanation:

The people that would participate in the market are those whose willingness to pay is higher than the market price for the grill.

The willingness to pay is the highest amount a person would be willing to pay for a good

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Javier : $350 > $300 would participate

Kama : $320 > $300 would participate

Lina : $200 < $300 would not participate

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While preparing the annual advertising budget, Tracy, the chief marketing officer of an online furniture store, is deciding whic
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Answer:

b. The resource allocator role

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The resource allocator role -

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All the resources and funds are handled by the resource allocator .

Any major decision or any confusion about the certain goods and services is resolved by the resource allocator .

Hence , from the given scenario of the question ,

The correct option is b. The resource allocator role .

5 0
3 years ago
Collaborative and co-operative approach among all the stake holders is important. This is a feature of the _______________ agile
andrezito [222]

Collaborative and co-operative approach among all the stake holders is important. This is a feature of the Dynamic system development method of  agile methodology.

<h3>What is collaborative approach?</h3>

A collaborative  learning approach  can be described as one which involves the operation of the activities or  tasks together within a  group or organization so as to make sure  that everyone participates.

It should be noted that Collaborative and co-operative approach among all the stake holders is important because it help them to work , hand in hand for the progress of the organization.

Find out more on the Dynamic system at brainly.com/question/16797306

#SPJ1

5 0
1 year ago
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