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LiRa [457]
3 years ago
5

Held-to-Maturity Bond Investment On January 1, 2016, Weaver Company purchased as held-to-maturity debt securities $500,000 face

value of Park Corporation's 8% bonds for $456,200. The bonds were purchased to yield 10% interest and pay interest annually. The bonds mature on January 1, 2021. Weaver uses the effective interest method of amortization. What amount should Weaver report on its December 31, 2016, balance sheet as an investment in held-to-maturity debt securities? a. $456,200 b. $461,820 c. $466,200 d. $450,580
Business
1 answer:
yulyashka [42]3 years ago
8 0

Answer:

b. $461,820

Explanation:

The computation of the amount reported in the balance sheet is shown below:

But before that we need to find out the amortization of discount which is

= Purchased value of bond × interest rate of return - face value of bond × interest rate

= $456,200 × 10% - $500,000 × 8%

= $45,620 - $40,000

= $5,620

Now the amount reported is

= Purchased value + discount amortization

= $456,200 + $5,620

= $461,820

Hence, the option b is correct

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An investor borrows an amount at an annual effective interest rate of 5% and will repay all interest and principal in a lump sum
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Answer:

d. 101

Explanation:

first we must determine the amount of the loan:

PV of face value = $1,000 / (1 + 3%)²⁰ = $553.68

PV of coupon payments = $40 x 14.877 (PV annuity factor, 3%, 20 periods) = $595.08

Loan amount = $1,148.76

Future value of the loan = $1,148.76 x (1 + 5%)¹⁰ = $1,871.21

You will receive 20 coupon payments of $40 each, which will be reinvested at 2% semiannual rate. You will also receive $1,000 corresponding to the face value of the bond.

Future value of the coupon payments = $40 x 24.297 (FV annuity factor, 2%, 20 periods)] = $971.88

Total money received at the end of the 10 year period = $971.88 + $1,000 = $1,971.88

Gain = $1,971.88 - $1,871.21 = $100.67 ≈ $101

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2 years ago
Many companies moved their operations from new england and the midwest to locations in the south because
Diano4ka-milaya [45]

Many companies moved their operations from new england and the midwest to locations in the south because: the South had less expensive site factors than northern regions.

<h3>Change of operation location from midwest to south</h3>

The major reason why most companies tend to moved their operation to south was to maximize profit.

Compare to midwest, the site factors such as rew material, labor and land were more cheaper in the south.

This companies change their operation location because they want to reduce cost as their aims and objective is to generate or maximize profit.

Inconclusion the South had less expensive site factors than northern regions.

Learn more about Change of operation location from midwest to south here:brainly.com/question/503796

8 0
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Marty's, a clothing company, has a number of outlets that are owned and managed by private individuals. These outlets are allowe
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3 years ago
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It is most accurate to say that successful niche marketing relies on a firm's ________ and its ________.
Neporo4naja [7]

It is most accurate to say that successful niche marketing relies on a firm's Greater knowledge of customers need and its special reputation.

<h3>What is a marketing niche?</h3>

A niche has to do with the particular brand or the particular trade that a person that is focused on buying and selling does.

This is to say that the person that is focused here would be successful if they know what their customers demand from them and the ways that they can carry out their activities for a greater reputation. The niche has the brand of the business.

Read more on business niche here: brainly.com/question/1519816

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4 0
2 years ago
Suppose in 2016, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for
Katen [24]

Answer:

1) C) The value of the services of the real estate agent

2) B) $6,400

Explanation:

First, there are two questions lumped together as one

Question 1:  Suppose in 2016, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2016?

A) The value of the house in 2013

B)The value of the house in 2016 minus depreciation

C) The value of the services of the real estate agent

4) The value of the house in 2016

Question 2: Suppose that a simple economy produces only four goods and services shoes. DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households.

Products         Quantity                            Price

Shoes            40                                     $60

DVDs             100                                   $18

Tomatoes       2,000                              $1

Ketchup          300                                  $4

Using the information in the above table, nominal GDP for this simple economy equals A) $7, 400. B) $6, 400. C) $5, 800 units. D) $2, 440.

<u>Answer to the First Question</u>

First the Gross Domestic Product of a Country usually represents the market value or referred to as total monetary value of finished products as well as services that were engaged in during a specific period of time and within the borders of that country. The thing about GDP is that it only reflects items that are captured as products or services and which are reported for the year.

In the question therefore, the GDP will only reflect the value of product or service that was newly created in 2016. The house was built in 2003, therefore the relevant GDP item (value of the house) was captured in 2003.

The only new value is the Value of the services of the real estate agent who was engaged in 2016 to facilitate the sales of the house.

<u>Answer to the Second Question:</u>

Nominal GDP  represents GDP valued at current market prices for products or services.

To calculate the Nominal GDP we look at the goods and then calculate based on their current market prices.

(Shoes = 40 pieces x $60) + (DVDS = 100 pieces x $18) + (Tomatoes (1000x$1 - 1/2 purchased by households)  + (Ketchup 300 x $4)

= $2400+ $1,800+ $1000+ $1,200

= $6,400

5 0
3 years ago
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