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Ivahew [28]
3 years ago
14

Debt is frequently incurred when plant assets are acquired. For example, debt may be incurred on the purchase of plant assets. D

ebt may also be incurred during the construction of plant assets. How is the interest in these two cases treated for financial reporting?
Debt for purchase Debt during construction

A. capitalize capitalize
B. expense expense
C. capitalize expense
D. expense capitalize
Business
1 answer:
Olenka [21]3 years ago
6 0

Answer:

A. capitalize capitalize

Explanation:

All the expenses incurred to make the asset usable are capitalized and those expenses become the part of cost of that assets for which that are incurred. Interest on debt to purchase an asset and in case to construct the asset both are capitalized, because these expenses are essential to make assets usable for the business.

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O'Brien Inc. has the following data: rRF = 5.00%; RPM = 6.00%; and b = 1.10. What is the firm's cost of equity from retained ear
MrRa [10]

Answer:

11.3%

Explanation:

O'Brien has the following data

rRF= 5%

RPM= 6%

b= 1.10%

Therefore the cost of equity can be calculated as follows.

= 5% + 6%(1.05)

= 5% + 6.3

= 11.3%

Hence the cost of equity is 11.3%

7 0
3 years ago
Jane Simpson rates low on conscientiousness. Which of the following statements is most likely to be true about Jane?
Pachacha [2.7K]

Answer: d. She will be easily distracted.

Explanation:

When one is said to be conscientious, it means that they are very dedicated to their duty. They value their duty and they want to do it well. A conscientious person is focused on their duty with the aim of fulfilling it to the best of their ability and so are reliable and trustworthy.

If a person is said to be low in conscientiousness, it means that they do not value their duty as well as they should and like Jane Simpson can get easily distracted from said duty.

7 0
3 years ago
Belltone Company made the following expenditures related to its 10-year-old manufacturing facility:
solong [7]

Answer:

Acc dep - manufacturing facility  205,000 debit

                           Cash                                205,000 credit

--to record cost heating system--

Wing              780,000 debit

        Cash                  780,000 credit

--to reocrd addition of a new wing--

maintenance expense 15,500 debit

                           cash              15,500 credit

--to record maintenance expense for the period

Assembly line 42,000 debit

               Cash              42,000 credit

--to record new assembly line--

Explanation:

1.- the improvements will decrease the accumulated depreciation

2.- The wing will be considered a new asset and depreciate separately

3.- the maintenance cost is cost of the period as it do not upgrade or change the productivity is a cost to maintain the current level.

4.- the assembly line will be reocgnize as an asset as increase the productive capaictive of the plant

5 0
3 years ago
A bond with a par value of $5,000 is quoted at 105. 38. What is the dollar price of the bond?
VikaD [51]

If par value of bond of $5000 is quoted at 105.38, then the dollar price of the bond is $4744.73.

Given that par value of bond of $5000 is quoted at 105.38.

We are required to find the dollar value of the bond whose par value of bond of $5000 is quoted at 105.38.

Bonds are basically units of corporate debt issued by companies and securitized as tradeable assets. Par value is basically the amount of money that issuer promises to repay bondholders as the maturity date of the bond.

Dollar price of the bond=Par value/Quoted amount

Dollar price of the bond=5000/105.38%

=$4744.73

Hence if par value of bond of $5000 is quoted at 105.38, then the dollar price of the bond is $4744.73.

Learn more about bond at brainly.com/question/25965295

#SPJ4

7 0
1 year ago
To make bond purchases, the Fed gets the money __________. Select the correct answer below: exclusively from proceeds it has rec
Viktor [21]

Answer: c. by creating it

Explanation:

Purchasing Bonds is a part of Monetary Policy by the Fed to increase the money supply in the economy. As such, when they purchase those bonds they do it with new money that they have created to be able to increase the supply in the market.

Apart from creating new money, they can also purchase the bonds by creating bank reserves for commercial banks in the country which the banks can then give out as loans to increase the money supply.

3 0
3 years ago
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