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Zepler [3.9K]
2 years ago
11

Crawford Inc. has bonds outstanding during a year in which the general (risk-free) rate of interest has risen. Crawford elected

the fair value option for the bonds upon issuance. What will the company report for the bonds in its income statement for the year? Multiple Choice Interest expense and a gain. Interest expense and a loss. A gain and no interest expense. Interest expense and no gain or loss.
Business
1 answer:
kiruha [24]2 years ago
7 0

Answer:

Interest expense and a gain.

Explanation:

US GAAP allows companies to report their financial assets or financial liabilities at their fair market value, this is called the fair value option.

If interest rates increase, and of course the coupon rate is fixed, then they value of bonds will decrease. The same logic applies to bonds sold at a discount.

In this case, the company must report an interest expense in the income statement regardless of what happens to the interest rate, since the company must pay the coupon rate.

Since the price of the bonds decreased, then the company's liabilities (bonds payable) decrease, so the company must report a gain = bond's previous value - bond's current value

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Answer:

Option D. We are 95% confident that the mean amount spent on electric service among the 160 households is between $151 and $216.

Explanation:

A confidence interval is a range of values, derived from the sample statistics, which may include the value of an unknown population parameter.

A 95% confidence interval indicates that between 152 of 160 samples (95%) of the same population will produce confidence intervals that will contain the population parameter.

It also means that we have a 95% confidence that the average (average amount) is among the resulting amounts obtained.

Logically, option "D" is missing the final part. This would be: D. We are 95% confident that the mean amount spent on electric service among the 160 households is between $ 15.

This is the only true option, since the test is based on a sample of only 160 households, the entire population of households cannot be included.

Hence, the correct option is:

Option D. We are 95% confident that the mean amount spent on electric service among the 160 households is between $151 and $216.

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Explanation:

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$35,000 + $20,000 + $400,000 = $455,000

Hence, the answer is $455,000 as we take into account all the pledges for the year 20x8.

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If we assigned three people to work with you on a complex project containing 75 tasks that you were responsible for, how would y
Anni [7]
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Citrus2011 [14]

Answer:

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