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
Arisa [49]
3 years ago
7

\On January 1, year 4, Purl Corp. purchased, as a long‐term investment, $500,000 face value Shaw, Inc. 8% bonds for $456,200. Th

e bonds were purchased to yield 10% interest. Purl has the positive intent and ability to hold the bonds until maturity on January 1, year 10. The bonds pay interest annually on January 1, and Purl uses the interest method of amortization. What amount (rounded to nearest $100) should Purl report on its December 31, year 5, balance sheet for this long‐term investment?
Business
1 answer:
stich3 [128]3 years ago
5 0

Explanation:

An investment kept to maturity (HTM) purchased at a discount will increase its valuation as maturity comes, which ensures that the book value of the investment should be the fair market value of the investment. The lender bears and reports the expenditure at amortized costs throughout the duration of an HTM fund.

The interest and amortization entries for the two years 2014 and 2015 that lead to the correct ending balance at December 31, 2015, are:

December 31, 2014:

DR: Interest receivable .08($500,000) 40,000

DR: Discount on HTM bonds 5,620

CR: Interest revenue .10($456,200) 45,620

December 31, 2015:

DR: Interest receivable .08($500,000) 40,000

DR: Discount on HTM bonds 6,182

CR: Interest revenue .10($456,200 + $5,620) 46,182

Thus, the ending net investment balance at December 31, 2015, is $456,200 + $5,620 + $6,182 = $468,002, or $468,000 (rounded to the nearest $100 as required by the problem).

You might be interested in
In economics, why must consumers, businesses, and governments make choices?
Rainbow [258]
Due to scarcity. There exist unlimited wants but only scarce amount of resources to meet those wants so items must be allocated through a system of prices or through exchange. 
4 0
2 years ago
The consumer decision making process is comprised of these five steps: Need recognition, Environmental Scanning, Evaluation of a
Goshia [24]

Answer:

need recognition, information search, evaluation of alternatives, purchase, and post purchase behavior

Explanation:

In simple words, A consumer refers to an individual who acquire a resource in exchange of money or some other resource, to satisfy his or her needs.

The customer decision-making process involves consumers becoming aware of and identifying their interests, gathering input about how to better meet those needs, weighing alternative possible choices, making a buying judgment as well as evaluating their investment.

5 0
2 years ago
You are to receive $500 at the end of one year; $250 at the end of two years; $300 at the end of three years. if the interest ra
Ulleksa [173]
The value is 210 dollars
6 0
3 years ago
How does a local water budget differ from the water budget of the whole earth?
Brrunno [24]
The way that a local water budget differs from the water budget of the whole Earth is that t<span>he local water budget is not balanced and the whole Earth is balanced.
Some societies in their local communities have more water than others, meaning that at the local level, these budgets are not equal, because some budgets are higher than the other ones. However, if you take a look at the budget for the whole planet, you will see that it is pretty balanced.
</span>
6 0
3 years ago
On the day before his presentation, Jamie was advised to.
stellarik [79]

Answer:

Go to the room beforehand and figure out what technology he needed to bring.

Explanation:

In bussiness presentation you wont always expect your client to provide you with the technology needed to give the presentation. It is best for you to ask and then come prepared rather than go empty handed.

5 0
3 years ago
Other questions:
  • A(n) __________ is a small group of people brought together for an intensive discussion of a topic. focus group social media sit
    11·1 answer
  • Managers establish a shared vision in order to motivate and inspire a group movement toward that vision. select one:
    15·1 answer
  • Which of the following nations is not one of the three members of the North American Free Trade Agreement (NAFTA)?
    11·2 answers
  • In response to the demand for two-pair cabling, manufacturers often connect two fibers together like a lamp cord to create the p
    7·1 answer
  • If the CEO of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager),
    15·2 answers
  • Business incubators will help new startup enterprises with regulatory compliance. true false
    7·2 answers
  • Which activity is done in Step 2 of comparison shopping?
    14·1 answer
  • Which of the following statements about the capital asset pricing model (CAPM), which is the "father" of the security market lin
    14·1 answer
  • Morey purchased a house for $150,000, paying $15,000 in cash and giving a mortgage to BigBank for the balance. When Morey defaul
    12·1 answer
  • Ela insistiu:
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!