If you buy the bond for $1,000 (YTM = 6%), then the yield increases to 7%, and you sell the bond immediately after the first coupon payment (in 1 year), hpr after 1-year
bond price = 60/1.07 +1000/1.07
=990.65
HPR = ((990.65-1000)+60)/1000
=5.06%
A credit score card price coupon is a paper slip with charge information, consisting of the due date and the card's assertion balance, that is supposed to be sent along side a check whilst paying a credit card invoice through mail.
The term "coupon" is derived from the historic use of actual coupons for periodic hobby payment collections. as soon as set on the issuance date, a bond's coupon charge remains unchanged and holders of the bond acquire fixed interest bills at a predetermined time or frequency.
The coupon rate, additionally called the nominal charge, nominal yield, or coupon fee is a percent that describes how plenty is paid by means of a set-income safety to the proprietor of that protection for the duration of the period of that bond.
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Answer:
b. $80,000
Explanation:
The computation of the deferred portion of its provision for income taxes should be given below:
= $300,000 ÷ 3 years
= $100,000
Now
= 30% of $100,000 + 25% of $100,000 + 25% of $100,000
= $30,000 + $25,000 + $25,000
= $80,000
Therefore the option b is correct
To record the retirement of bonds we have to debit the bond payable account with $435,376, debit the interest account with $22,914, and credit the cash account with $458,290.
The retirement of the bond takes place when they are required to be redeemed before they mature. In other words, if the company wants to buy back its bonds before the period of the bond is over. Sometimes the company will also have to pay the interest amount that is due on the bond to the bond-holder.
The bondholders are creditors of the company. These are the people to have loaned money to the company and who the company has to pay back either at maturity or when the company wants. This should be specified to the bondholder before issuing him the bond. The transaction that will be written to record the transaction will be:
Bonds Payable a/c Dr. 435,376
Interest a/c Dr. 22,914
To cash a/c 458,290.
(Being the bonds retired and interest amount paid)
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Answer:
E. None of the above
Explanation:
because the price level is not known, we can not tell definitely that the output is increased or unemployment is decreased or standard of living is increased
.
Therefore, we cannot conclude on anything.
Answer:
a. $125
b. $10,300
c. $10,425
Explanation:
a. The computation of the explicit cost is shown below:
Explicit cost = Purchase of office supplies + Monthly electricity bill
= $75 + $50
= $125
b. The computation of the implicit cost is shown below:
Implicit cost = Lost of salary + rent out amount lost
= $10,000 + $300
= $10,300
c. The computation of the cost is shown below:
Economic cost = Explicit cost + Implicit cost
= $125 + $10,300
= $10,425
