Calculate, from the following information accumulated by Bob Verna, the adjusted cash balance at the end of July.
Bank statement ending cash balance $6,000
General ledger cash balance ending 8,500
Bank monthly service charge 90
Deposits in transit 5,000
Outstanding cheques 3,000
NSF cheque returned with bank statement 410
Answer:
C. debit cash, credit premium on bonds payable and bonds payable
Explanation:
Since the contract rate is greater than the market rate, the bond is issued at a premium. And, the journal entry is shown below:
Cash A/c Dr XXXXX
To Premium on bonds payable A/c XXXXX
To Bonds payable A/c XXXXX
(Being bond is issued at a premium is recorded)
When the bond is issued at a premium, we debited the cash account and credited the premium on bonds payable and bonds payable account
Answer:
Coupon (R) = 6.8% x 10,000 = $680
Face value (FV) = $10,000
Number of times coupon is paid in a year (m) = 2
No of years to maturity = 8 years
Yield to maturity (Kd) = 8% = 0.08
Po = R/2(1- (1 + r/m)-nm) + FV/ (1+r/m)n
m
r/m
Po = 680/2(1-(1+0.08/2)-8x2) + 10,000/(1 + 0.08/2
)8x2
0.08/2
Po = 340(1 - (1 + 0.04)-16) + 10,000/(1 + 0.04)16
0.04
Po = 340(1-0.5339) + 10,000/1.8730
0.04
Po = 3,961.85 + 5,339.03
Po = $9,300.88
Explanation:
The current market price of a bond is a function of the present value of semi-annual coupon and present value of the face value. The present value of semi-annual coupon is obtained by multiplying the coupon by the present value of annuity factor at 8% for 8 years. The present value of face value is obtained by discounting the face value at the discount factor for 8 years. The addition of the two gives the present value of the bond. All these explanations have been captured by the formula.
Answer: Relative scarcity could be described as that where the resources are limited in supply for a short while, due to manufacturing or supply challenges.
Absolute scarcity could he described as where supply is naturally limited. No possibility of the supply increasing.
Explanation:
Relative scarcity could be described as that where the resources are limited in supply for a short while, due to manufacturing or supply challenges.
Absolute scarcity could he described as where supply is naturally limited. No possibility of the supply increasing.
In relative scarcity, there is a probability of the supply to be made available later while in absolute, there is no possibility of it happening.
