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Hunter-Best [27]
3 years ago
12

Art Company issued 6%, 5 year bonds, with par value of $1,600,000, paying semiannual interest for $1,470,226. The annual market

rate of interest on the date of issue was 8%. Assuming effective interest method of amortization, calculate the bond interest expense on the first interest payment date. Select one: A. $117,618 B. $ 58,809 C. $129,774 D. $ 48,000
Business
1 answer:
Soloha48 [4]3 years ago
6 0

Answer:

The correct answer is option (B).

Explanation:

According to the scenario, the given data are as follows:

Bond carrying value = $1,470,226

Rate of interest = 8%

Rate of interest (Semiannual ) = 4%

So, we can calculate the the bond interest expense on the first interest payment by using following formula:

The bond interest expense = Bond carrying value × rate of interest (semiannual)

By putting the value we get

= $1,470,226 × 4%

= $58,809

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John is considering a purchase of a new Toyota that costs $20,000 at a local dealership. John estimates the annual cost of maint
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Answer:

John's estimated cost of owning and driving the car for three years is $17,500

Explanation:

The computation of the estimated cost for the three years is shown below:

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= $17,500

The selling cost should be deducted so that accurate value can come and the annual cost is given for one year only but we have to compute for the three years so we multiply it by three years.

3 0
3 years ago
Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage: (a) 10 year
Andru [333]

Answer:

Conversion of Estimates of Useful Life to Straight-line Depreciation Rate:

   Useful Life        Straight-line

                         Depreciation Rate

(a) 10 years              10%

(b) 8 years             12.5%

(c) 25 years              4%

(d) 40 years           2.5%

(e) 5 years             20%

(f) 4 years              25%

(g) 20 years            5%

Explanation:

a) Data and Calculations:

                               Straight-line

    Useful Life     Depreciation Rate   Conversion

(a) 10 years            10%                         100/10

(b) 8 years             12.5%                      100/8

(c) 25 years           4%                           100/25

(d) 40 years           2.5%                       100/40

(e) 5 years             20%                        100/5

(f) 4 years              25%                        100/4

(g) 20 years          5%                           100/20

3 0
3 years ago
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Ksivusya [100]

Answer:

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