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Alona [7]
3 years ago
5

Ajax, Inc., issued callable bonds with a par value of $1,000,000 that require the payment of a call premium of $10,000. The bond

s have a carrying value of $990,000. We call these bonds prior to maturity on September 30. Please explain the calculation and journal entry
Business
1 answer:
ivann1987 [24]3 years ago
7 0

Answer:

Explanation:

The journal entry is shown below:

On September 30

Bonds payable A/c Dr $1,000,000

Loss on bond retirement A/c Dr $20,000

          To Discount on Bond A/c  $10,000

          To Cash A/c $1,010,000

(Being the callable bond is recorded)

The computation is shown below:

For cash

= Par value of bond + Premium

= $1,000,000 + $10,000

= $1,010,000

For Loss, it would be

= $1,010,000 - $990,000

= $20,000

And, the remaining amount would be transferred to discount on bond

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On October 1, 2015, Zircon Jewelry Company accepted a 4-month, 10% note for $2,400 in settlement of an overdue account receivabl
Whitepunk [10]

Answer:

Explanation:

The journal entry is shown below:

Cash A/c Dr $2,480

         To Interest receivable $60

         To Interest revenue $20

         To Note receivable $2,400

(Being the collection of funds is recorded)

The computation of interest receivable is shown below:

= Principal × rate of interest × number of months ÷ (total number of months in a year)  

= $2,400 × 10% × (3 months ÷ 12 months)

= $60

And for interest revenue would be

= Principal × rate of interest × number of months ÷ (total number of months in a year)  

= $2,400 × 10% × (1 months ÷ 12 months)

= $20

7 0
3 years ago
For 2019, Skresso Co. reported $1.82 of earnings per share of common stock. During 2020, the firm had a 4% common stock dividend
mart [117]

Answer:

$1.75

Explanation:

Earnings per share to be reported = Earnings per share of commo stock * (1 - 4%)

Earnings per share to be reported = $1.82 * 96%

Earnings per share to be reported = $1.7472

Earnings per share to be reported = $1.75

So, the 2019 earnings per share to be reported in the annual report for 2020 are $1.75.

4 0
3 years ago
On the basis of this information, what were total maintenance costs when the company experienced 23,000 machine hours of activit
spayn [35]

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the total cost for each activity level:</u>

High activity level= 27,000*27.3= $737,100

Low activity level= 23,000*34.3= $788,900

<u>Now, using the high-low method, we can determine the variable and fixed costs:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (788,900 - 737,100) / (27,000 - 23,000)

Variable cost per unit= $12.95 per machine-hour

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 788,900 - (12.95*27,000)

Fixed costs= $439,250

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 737,100 - (12.95*23,000)

Fixed costs= $439,250

<u>Finally, for 25,000 hours:</u>

Total cost= 439,250 + 12.95*2,5000

Total cost= $763,000

8 0
3 years ago
If the U.K. exports 14 billion British Pounds of​ products, and imports 10 billion British pounds of​ products, its trade balanc
rodikova [14]

Answer:

D) 4 billion British pounds

Explanation:

Trade balance or balance of trade can be defined as the difference between a country's export and import at a particular period of time.

It could be a deficit or surplus.

Deficit trade balance refers to when the export of a country is less than it's import. This means more products are imported that exported.

Surplus trade balance refers to when export of a country is more than the import.

Import is the bringing in of goods from a foreign country. This means a particular country purchase goods from another country.

Export is the sending out of goods to a foreign country. That is the selling of goods to another country.

Trade balance= Export- Import

=14 billion British pounds- 10 billion British pounds

=4 billion British pounds

The trade balance that occurs here is surplus trade balance where export is more than import.

5 0
3 years ago
Bayer Company uses the periodic inventory system. Bayer Company sold goods on account with a retail price of $ 1 comma 800 and a
kaheart [24]

Answer:

1400[ add 1 +500+800=1400

Explanation:

3 0
3 years ago
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