Large plate in catering

Mills Corporation acquired as a long-term investment $200 million of 7% bonds, dated July 1, on July 1, 2018. Company management

Evgen [1.6K]

Answer:

investment on bonds 200 millions

premium on bonds 40 millions

cash 240 millions

to record the purchase of bonds

cash 7 millions

interest revenue 6 millions

premium on bonds 1 million

interest proceeds of december 31th

Balance sheet:

bonds 200

premium 39

net 239

cash 250 millions

investment on bonds 200 millions

premium on bonds 39 millions

gain on sale of invesment 11 millions

to record the sale of bonds

Explanation:

recording the bonds:

acquisition 240

bonds face value (200)

premium 40

It is a premium, as the bonds where purchased at higher price than face value

Interest at December 31th

To calculate the interest, we will calcualte the interest per payment:

7% annual coupon rate /2 payment per year = 3.5% semi-annual rate

5% market rate /2 payment per year = 2.5% semi-annual market rate

cash proceeds: 200 x 3.5% = 7

interest revenue:

carrying value x market rate

240 x 2.5% = 6

amortization 7 - 6 = 1

Value in the balance sheet:

the net value of the bond will be the face value plus the carrying value of the premium

Sale of the bonds:

selling price 250

carrying value of the bonds (239)

gain on sale of bonds 1 1

It is a gain, as the bonds are being sold at a higher price than his carrying value.

7 0

3 years ago

What‘s the main reason our culture has normalized credit cards over the past 60 years?.

harina [27]

We have slowly increased our demand for high-value items and therefore need credit cards rather than cash because carrying around.

For illustration,$ 40k in cash on your way to buy an auto isn't the safest idea. We can change the normalization of debt in the future by tutoring in academic ways to avoid debt and tutoring the true consequences of having so important debt.

Credit is generally defined as an agreement between a lender and a borrower. Credit also refers to an existent's or business's creditworthiness or credit history. In account, a credit may either drop means or increase arrears as well as drop charges or increase profit.

credit, which is capitalist that is available for you to borrow, debt is capitalist you've formerly espoused but haven't yet paid back. Credit is simply the capability to acquire debt.

still, you're adding$ 50 in debt, If you use your credit card to make a$ 50purchase. A loan can be considered as a disbenefit balance when the loan is given out by the business while it can be considered as a credit balance when it's taken by the business. Also, read MCQs on Trial Balance.

Learn more about credit here: brainly.com/question/6872962

#SPJ4

7 0

1 year ago

Southern Markets has sales of $78,400, net income of $2,400, costs of goods sold of $43,100, and depreciation of $6,800. What is

Helen [10]

Answer:

36.35%

Explanation:

According to the scenario, computation of the given data are as follows,

Sales = $78,400

Net income = $2,400

Cost of goods sodl = $43,100

Depreciation = $6,800

So, we can calculate the EBIT value by using following formula:

= EBIT ÷ Sales

= ($78,400 - $43,100 - $6,800) ÷ ($78,400)

= $28,500 ÷ $78,400

= 36.35%

Hence, the common-size statement value of EBIT is 36.35%

3 0

3 years ago

Question #8

mojhsa [17]

It’s mainly talking about money and workers and how businesses increase the focus on the task soo i think the answer is “The economy”

3 0

3 years ago

Read 2 more answers

As a financial responsibility, the sponsoring broker must keep a journal

anzhelika [568]

The answer is for each escrow account.

4 0

3 years ago