1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Vika [28.1K]
3 years ago
6

ABC Company received $9,631 for its 5-year, 10% bonds with a total face value of $10,000. The market rate of interest was 11%. T

he bonds pay interest annually on December 31. Approximately how much interest expense will ABC Corporation record on the first annual interest payment date using the effective-interest method?
A.

$1,059

B.

$1,000

C.

$1,074

D.

$963.10
Business
1 answer:
anyanavicka [17]3 years ago
7 0

Answer:

A.  $1,059

Explanation:

The effective-interest method comes into play when bonds are purchased at a discount or premium.

This bond has the face value of $10,000, and has been purchased at $9,631 called the carrying amount at beginning/ first year in bond life.

The bond’s interest income is calculated as the carrying amount multiplied by the market rate of interest. In this case, the first annual interest income for bond holder is $1,059.41 = $9,631 x 11%

Then ABC Corporation record $1,059.41 for its interest expense on the first annual interest payment date using the effective-interest method

You might be interested in
Which activities are often required of someone who is in the performing arts?
Delicious77 [7]
<span>Which activities are often required of someone who is in the performing arts?

Answer:</span><span> Choreography is the art of making dances, and the </span>person<span> who practices this art is called a choreographer. (Music and Dance)</span>
3 0
3 years ago
Davidson international has 13,700 shares of stock outstanding at a price per share of $28. the firm has decided to repurchase 50
alexdok [17]

The shareholder equity is equal to:

$28/share * 13 700 shares = $ 383,600

This is the total capital of Davidson International. Now, assuming that there is no additional income since it is not implied in the problem, the total equity does not change. However, the shares become: 13,700 + 500 = 14 200 shares.

Price per share now becomes:

$383 600 / 14 200 shares = $27/share

6 0
3 years ago
Vino Winery is considering the purchase of a state-of-the-art bottling machine. The new machine will cost $20,790 and will have
jolli1 [7]

Answer:

the internal rate of return is 6%

Explanation:

The computation of the internal rate of return is shown below;

Given that

Years         Cash flows

0                -$20,790

1                   $6,000

2                  $6,000

3                 $6,000

4                 $6,000

Now apply the following formula i.e..

= IRR()

After applying the above formula, the internal rate of return is 6%

6 0
3 years ago
If a company's cost of capital increases unexpectedly, which of the following actions will help it maintain or increase its stoc
Kitty [74]

Answer:

III) Increase its gross margin

Explanation:

If the company increases its gross margin, it will have a direct impact on the company's net profit. The higher a company's net profit, the higher its value = higher stock price.

The only option that increases the value of the company is to increase its net profit, since:

  • an increase in inventory will result in a lower stock price
  • a decrease in the asset turnover ratio will result in a lower stock price
  • the issuing of stock dividends will only increase the price of stock in the short run, later the price will adjust down since the company's book value will lower
4 0
3 years ago
You work as the inventory manager at a golf pro shop. The club pro has reviewed and approved a new golf club collection, and you
vladimir2022 [97]

'You work as the inventory manager at a golf pro shop.' In this scenario, you are in the role of buyer. This is further explained below.

<h3>Who is a buyer?</h3>

Generally, a buyer is simply defined as one who purchases a product or service.

In conclusion, In a golf pro shop, you're the inventory manager.' You play the buyer in this scenario.

Read more about  buyer

brainly.com/question/13954956

#SPJ1

8 0
2 years ago
Other questions:
  • Big Walnut Nut Company has the right to buy back its preferred stock from its preferred stockholders; however, the company will
    10·1 answer
  • Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly dem
    8·1 answer
  • Marcy left a large Fortune 500 company to go to a small start-up technology firm. Earlier in her career, Marcy wanted a high sal
    5·1 answer
  • A tire without good traction has less _____.
    12·2 answers
  • Which of the following would motivate companies to choose Chase strategy for aggregate planning. Group of answer choices (1). sk
    9·2 answers
  • Investors put up $520,000 to construct a building and purchase all the equipment for a new restaurant. The investors expect to e
    5·1 answer
  • The price elasticity of demand measures the: A. responsiveness of quantity demanded to a change in quantity supplied. B. respons
    12·1 answer
  • Suppose that the country of Libraria made a concerted effort to increase the educational level of its people. If this effort had
    11·1 answer
  • Choose the term that best matches the description given.
    14·1 answer
  • The middle sale when sales for a given period of time are arranged in order of their increasing value is the:__.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!