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
nikitadnepr [17]
4 years ago
7

A corporation called an outstanding bond obligation four years before maturity. At that time there was an unamortized discount o

f $300,000. To extinguish this debt, the company had to pay a call premium of $100,000. Ignoring income tax considerations, how should these amounts be treated for accounting purposes? A) Amortize $400,000 over four years B) Charge $400,000 to a loss in the year of extinguishment C) Charge $100,000 to a loss in the year of extinguishment and amortize $300,000 over four years D) Either amortize $400,000 over four years or charge $400,000 to a loss immediately, whichever management selects
Business
1 answer:
Alex17521 [72]4 years ago
4 0

Answer:

B) Charge $400,000 to a loss in the year of extinguishment.

Explanation:

The $300,000 of amortized discount means that the corporation issued the bonds at a discount and was amortizing the discount over the bond's lifespan.  A discount is already a loss, and we must add the $100,000 that the corporation had to pay in excess (premium) to repurchase the bonds. So the total loss resulting from this bond issuance and repurchase was $300,000 + $100,000 = $400,000. Accrual accounting recognizes losses as soon as they happen, so this loss must be recognized as soon as the bonds are repurchased.

You might be interested in
Phishing is looking for and reporting online scams.<br><br> True or <br> False
MAXImum [283]
False. Phishing is usually considered emails that are sent that look genuine but are actually from scammers trying to obtain personal or financial information. 
4 0
4 years ago
Read 2 more answers
Bonnie manages the distribution network for her company, which manufactures mountain bikes. Her company’s bikes are sold across
valentina_108 [34]

A long distribution channel Bonnie should incorporate for her company

Option B

<u>Explanation: </u>

A distribution channel is an organization or intermediary network that moves a product or a service until it meets the last customer. Wholesalers, dealers, suppliers and even Web can be part of the distribution channels.

In long channels, product flows from producers to final customers are carried out via multiple levels of distribution in which each level is generally made up of more than one location.

In general distribution channels are divided into two systems which are: direct customer shipping and indirect shipping, which involves an intermediary level or two, including distributor/retailer warehouses in which goods from those intermediaries can be delivered to consumers differently.

5 0
3 years ago
Smith Companypurchases components from three suppliers. Components purchased from Supplier A are priced at $5 each and used at t
Allisa [31]

Answer:

Smith Companypurchases components from three suppliers. Components purchased from Supplier A are priced at $5 each and used at the rate of 20,000 units per year. Components purchased from Supplier B are priced at $4 each and are used at the rate of 2,500 units per year. Components purchased from Supplier C are priced at $5 each and used at the rate of 900 units per year. Smith incurs a holding cost of 20 percent per year. Currently, Smithpurchases a separate truckload from each supplier. As part of JIT drive, Smith has decided to aggregate purchases from the three suppliers. The trucking company charges a fixed cost of $400 for the truck with an additional charge of $100 for each stop. Thus, if Smith asks for a pickup from only one supplier, it charges$500; from two suppliers, it charges $600, and from three suppliers, it charges $700. Suggest a replenishment strategy for Smith that minimizes annual cost.

Required:

Compare the cost of your strategy with Smith's current strategy of ordering separately from each supplier.

Explanation:

I don't know

7 0
3 years ago
According to the path –goal theory of leadership, path clarification means that the leader works with subordinates to help them
otez555 [7]

Answer:

True

Explanation:

The path-goal theory emphasizes a leadership style that enhances the performance of the subordinates by helping team members identify clearly the path through which they would accomplish their goals coupled with the fact that such accomplishment would be met by great rewards.

In achieving the desired results under the path-goal theory, employees are reminded of behaviors that would yield positive outcomes since the right attitude which is a product of behavior is important to deliver on job set targets.

Having the right positive mental attitude sets success apart from failure.

5 0
3 years ago
Read 2 more answers
True or false: insurers may withhold a portion of providers' payments to create a payment risk pool, which will be kept by the i
Feliz [49]
True, <span>insurers may withhold a portion of providers' payments to create a payment risk pool, which will be kept by the insurer if providers do not meet performance targets. This is to protect their investment and liability</span>
3 0
3 years ago
Other questions:
  • On the island of Martha's Vineyard, jobs are plentiful during the summer months, but difficult to find in September once the tou
    6·1 answer
  • Gannon Enterprises is in the midst of a major strategic change. To lessen resistance from some of thesenior managers who are opp
    6·2 answers
  • A big concern with trying to measure utility is that:a. it is difficult to measure marginal utility.b. individuals cannot place
    14·1 answer
  • What instrument did the piano originate from
    12·2 answers
  • Mitchell Company was authorized to issue 50,000 shares of common stock. The company issued 27,000 shares of stock and later purc
    12·1 answer
  • ABC Company issues a bond with a face value of $100,000 at face amount on January 1. ABC prepares financial statements only at D
    14·1 answer
  • What must country commit to in order to become a part of the Organization of Economic Cooperation? How does one's language force
    7·1 answer
  • State 3 advantages in setting up a business in Maldives?
    6·1 answer
  • Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $308,000, total variable expenses were $243,320, an
    8·1 answer
  • Please give me correct answer with explanation​
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!