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Lana71 [14]
3 years ago
13

Basil Corporation issues for cash $1,000,000 of 8%, 10-year bonds, interest payable annually, at a time when themarket rate of i

nterest is 7%. The straight-line method is adopted for the amortization of bond discount orpremium. Which of the following statements is true?
a.The carrying amount increases from its amount at issuance date to $1,000,000 at maturity.
b.The carrying amount decreases from its amount at issuance date to $1,000,000 at maturity.
c.The amount of annual interest paid to bondholders increases over the 10-year life of the bonds.
d.The amount of annual interest expense decreases as the bonds approach maturity.
Business
1 answer:
Dmitrij [34]3 years ago
6 0

Answer:

b.The carrying amount decreases from its amount at issuance date to $1,000,000 at maturity.

Explanation:

as the market rate was lower than the bond rate, their market price will be higher than face value and so, a bond premium will arise.

The bond premium increase the carrying value of the bonds and will be amortizate over the life of the bonds.

so we have:

1,000,000 + premium = carrying value

over the course fo the years, the premium will decrease therefore, so the carring value. In the end (maturity), the premium will be zero and carring valeu will equal the face value.

It will make statement b correct.

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Calculate net worth using the following information. Assets Liabilities car - $3,500 car loan - $3,000 savings account - $1,000
raketka [301]
Ok, I'm going to tell you how to calculate it and the answer.
so what you do is add up your assets and then add up your liabilities.
then you subtract your liabilities from your assets in this case your assets add up to 4,700 and your liabilities add up to 3,500.
then you subtract 4,700 from 3,500 since your liability is a lower number.
And then your answer would be $1,200 dollars hope it helped :D
3 0
3 years ago
Read 2 more answers
Does mixed economy have private ownership?
labwork [276]

YES, mixed economy have private ownership.

A mixed economy is variously described as an economic machine mixing elements of a market financial system with factors of a deliberate economy, markets with country interventionism, or private organisation with public organisation. common to all blended economies is a mixture of unfastened-marketplace principles and principles of socialism.

A blended economic machine is a device that combines components of both capitalism and socialism. A blended monetary machine protects personal property and permits a degree of financial freedom in the use of capital, but additionally allows for governments to intrude in financial sports if you want to reap social objectives.

Learn more about mixed economy here:brainly.com/question/13467040
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6 0
1 year ago
An animator needs a laptop for audio/video editing, and notices that he can pay $2600 for a Dell XPS laptop, or lease from the m
Goshia [24]

Answer:

Cost of leasing over buying is $144.59

Explanation:

For computing the cost of leasing the laptop over buying it outright, we have to calculate the present value is shown below:

Given that,  

Future value = $0

Rate of interest = 14%  ÷ 12 months = 1.17%

NPER = 4 years  × 12 month = 48 months

PMT = $75

The formula is shown below:

= PV(Rate;NPER;-PMT;FV;type)

So, after solving this, the present value is $2,744.59

And, the buying amount is $2,600

So, the difference is

= $2,744.59 - $2,600

= $144.59

3 0
3 years ago
What is the difference between being overstaffed and overhired
sp2606 [1]
Overstaffed is "having more members of staff than are necessary" and overhired is "hiring too many employees".
6 0
3 years ago
2. NEIU Company has no beginning and ending inventories, and reports the following information for its only product: Direct mate
Mrac [35]

Answer:

Product cost per unit = $13

Explanation:

<em>Absorption costing values units of inventory and production using full cost per unit. Full cost per unit includes variable cost and a portion of fixed production overheads. The fixed production overhead are charged to cost units using predetermined overhead absorption rate.</em>

The full cost per unit = D.mat cost + D.labour cost + Variable overheads+ Fixed overheads.

Total full absorption cost = 125,000 + 100,000 + 75,000 + 25,000=325,000

Full cost per unit = Total full absorption cost/Number of units

                            = 325,000/25,000 =$13

<em>Note that we excluded non- production cost like selling and administrative from the computation because they are not related to production</em>

Product cost per unit = $13

4 0
2 years ago
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