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
lbvjy [14]
3 years ago
8

On January 1, $1,000,000, 20-year, 8% bonds, were issued for $1,070,000. Interest is paid annually on January 1. If the issuing

corporation uses the straight-line method to amortize discounts and premiums on bonds payable, the annual amortization amount is
Business
1 answer:
Butoxors [25]3 years ago
5 0

Answer:

Annual Amortization expense = $76,500

Explanation:

In the given case the interest expense for the year will be $1,000,000 \times 8% = $80,000

Now, further the bonds are issued at a value more than face value, i.e. on premium of $1,070,000 - $1,000,000 = $70,000

Estimated life = 20 years

Therefore, per year premium amortization = $70,000/20 = $3,500 each year.

Thus annual amortization = $80,000 interest - Premium amortization $3,500

= $76,500.

In case if bonds are issued on discount then amortization is added to interest amortization as would increase the cost of company.

Final Answer

$76,500

You might be interested in
Goods a company acquires to use in making products are called:
Afina-wow [57]

Answer:

b. Raw materials inventory.

Explanation:

There are basically three cycles to make a product ready to sale

1. Raw material

2. Work in process

3. Finished goods

The raw material is the part of the product. In the work in process, the products parts are in process to combine all the parts of the products. And, in the finished goods cycle, after processing the product, the product is finished and then the product is ready to sale.

The costs of goods sold and the conversion cost are the cost which are related to the product

6 0
3 years ago
When can a bank repossess someone's car?
Marysya12 [62]

Answer:

A. when the owner defaults on the loan payment

6 0
2 years ago
Read 2 more answers
A company switched from the cash basis to the accrual basis for recognizing warranty expense. The unrecorded liability for warra
Murrr4er [49]

Answer:

Report a prior period adjustment decreasing retained earnings by $1,365,000.

Explanation:

Going by the question we can derive that $2,100,000 is the prior period's warranty. Consequently, it will be charged to the current year's earnings following the deduction of tax, 35%.

(2,100,000 *65) /100 = $1,365,000

This above calculation is so because Under the accrual basis of accounting...operating expense are reported on the income statement in the particular period when they took place or when they expire

4 0
3 years ago
Read 2 more answers
Select examples of public goods provided to everyone by the government
bogdanovich [222]
A) protecting the country and D) public schools im sure this is the answer
3 0
3 years ago
Read 2 more answers
Brainleist What Does Success Look Like After You've Been on the Job Six Months?
stiks02 [169]

Answer:

it depends on the job and if you are experienced, If you get a job that pays 15$ an hour then you whould be at a good start

7 0
3 years ago
Read 2 more answers
Other questions:
  • Culture and Ethical Business PracticesThe business world is becoming increasingly global due to advances in technology and trave
    10·1 answer
  • El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about
    10·1 answer
  • On December 29, year 6, Kolek Company granted 100,000 stock options to a group of 100 employees, enabling each employee to buy 1
    6·1 answer
  • The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $11,000,
    14·1 answer
  • Net exports might be a negative amount if Americans
    6·1 answer
  • Installing strong locks on the doors that lead to your company's data servers is an example of which of the following security m
    6·1 answer
  • The following table shows a simplified consolidated balance sheet for the entire
    8·1 answer
  • This type of organization allows for many people to make decisions about the same service or need within the company.
    11·1 answer
  • A recent college graduate with a major in economics attends a job fair but has not yet found a job. this graduate is counted as
    15·1 answer
  • a treasury bill has a face value of $65,000, an asked yield of 3.05%, and matures in 60 days. what is the price of this bill?
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!