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DENIUS [597]
3 years ago
15

Tyrell Company issued callable bonds with a par value of $24,000. The call option requires Tyrell to pay a call premium of $500

plus par (or a total of $24,500) to bondholders to retire the bonds. On July 1, Tyrell exercises the call option. The call option is exercised after the semiannual interest is paid the day before on June 30. Record the entry to retire the bonds under each separate situation.
1. The bonds have a carrying value of $19,500.

2. The bonds have a carrying value of $25,000.
Business
1 answer:
Wittaler [7]3 years ago
3 0

Answer:

case 1)

bonds payable    24,000

loss on retirement 5,000

        discount on BP           4,500

       cash                           24,500

case 2)

bonds payable    24,000 debit

premium on BP      1,000 debit

        gain on retirement        500 credit

       cash                           24,500 credit

Explanation:

we are going to write off the bonds payable and their discount account

we also debit the cash account for the amount of cash outlay to retire the bond

the difference between cash and the carrying value will be the loss on retirement when lower

and a gain on retirement when higher.

case 1)

carrying value              19,500

total cash outlay        (24,500)

loss on retirement       (5,000)

case 2)

carrying value              25,000

total cash outlay         (24,500)

gain on retrement             500

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You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows.
Firlakuza [10]

Answer:

A.- DECREASE

B.- DECREASE

C.- INCREASE

D.- INCREASE

E.- INCREASE

Explanation:

a. The discount rate increases

DECREASE the discoutn factors will be higher therefore, the present values lower.

b. The cash flows are in the form of a deferred annuity, and the total to $100,000. You learn that the annuity lasts for 10 years rather than 5 years, hence that each payment is for $10,000 rather than for $20,000

DECREASE Because the cashflow is generate on a longer period there is more exposure to discount rates.

c. The discount rate decreases

INCREASE The discount factor are lower. This situation is the opposite as (a)

d. The riskiness of the investment's cash flows <u>decreases</u>

INCREASE a lower risk derivates in lower cost of capital thus, lower iscount rates. This increase the present value of the cashflow.

e. The total amount of cash flows remains the same, but more of the cash flows are received in the earlier years and less are received in the later years.

INCREASE as most of the future cash flows are at the beginning they have less exposure to time value of money.

4 0
3 years ago
Privacy act of 1974, the US government is prohibited from storing many types of data about US citizens. The act does NOT prohibi
jok3333 [9.3K]

Answer:

The correct answer is A

Explanation:

The action, looking through the paradigm of Utilitarianism would be considered ethical.

Any action especially by the ruling powers, government or political class which regardless of the rule of law is aimed at engineering the social, economic and or political levers of any state to the end that it betters society as a whole would be considered Utilitarian.

Utilitarianism is simply a theory or philosophy which preaches and teaches the need for happiness or pleasure whilst condemning any action, policy, thought or law that stimulates harm and unhappiness.

According to the question, the Privacy Act of 1974 had debarred the acquisition of Intelligence especially for the purpose of transacting business. Sooner or later it purchased, through an entity, information about its citizens on the basis of the need for National Security.

The act of seeking the welfare of the state thus becomes permissible reason under an utilitarian government for it to break a protocol or an existing edict.

Cheers!

Cheers!

7 0
3 years ago
Total payroll of Walnut Co. was $1,900,000, of which $330,000 represented amounts paid in excess of $118,500 to certain employee
babymother [125]

Answer:

A.

Dr Salaries and Wages Expense $1,900,000,

Cr Withholding Taxes Payable $461,000,

Cr FICA Taxes Payable 124,890

Cr Cash 1,314,110

B.

Dr Payroll Tax Expense 158,535

Cr FICA Taxes Payable 150,135

Cr FUTA Taxes Payable 3,360

Cr SUTA Taxes Payable 5,040

Explanation:

Walnut Co

A.

Dr Salaries and Wages Expense $1,900,000,

Cr Withholding Taxes Payable $461,000,

Cr FICA Taxes Payable 124,890

Cr Cash 1,314,110

(1,900,000 – $330,000) × 7.65%+ ($330,000 × 1.45%)

=1,570,000×0.0765+4,785

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B.

Dr Payroll Tax Expense 158,535

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(145,350+4,785)

Cr FUTA Taxes Payable 3,360

($1,900,000 – $1,480,000) × .8%

420,000×.8%

Cr SUTA Taxes Payable 5,040

($420,000 × 1.2%)

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sveticcg [70]

Answer:

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6 0
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Kazeer [188]

Answer:

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I hope this helps someone!!

7 0
2 years ago
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