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
mario62 [17]
2 years ago
7

A company issued 5-year, 7% bonds with a par value of $500,000. The market rate when the bonds were issued was 6.5%. The company

received $505,000 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:
Business
1 answer:
san4es73 [151]2 years ago
4 0

Answer:

The correct answer is $17,000.

Explanation:

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

Bonds percent = 7%

Par value of bonds = $500,000

Market rate = 6.5%

Cash received = $505,000

So, we can calculate the amount of recorded interest for semiannual interest period by using following formula:

First we calculate the premium on bonds,

So, Premium on bonds = Cash received - Par value of bonds

= $505,000 - $500,000

= $5,000

So, straight line amortization = Premium on bonds ÷ years

= $5,000 ÷ 5

= $1,000

So, Amount of interest expense for first semiannual is as follows:

Amount of interest = ( Par value of bonds × Bonds percent ) ÷ 2 - (straight line amortization ÷ 2)

= ( $500,000 × 7% ) ÷ 2 - ( $1,000 ÷ 2 )

=  $17,500 - $500

= $17,000.

You might be interested in
Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all cus
Leto [7]

Answer:

A demand curve

Explanation:

6 0
2 years ago
How is creative thinking similar to a child’s thinking? A. Neither process restricts itself to logical solutions. B. Both though
-BARSIC- [3]

Answer: D. Both thought processes are linear

Explanation: I think I'm not too certain.

5 0
2 years ago
Airbase is a consumer electronics company known for its affordable mobile devices that follows a cost-leadership strategy. In th
lapo4ka [179]

Answer: 4. a consumer electronics company popular among price-conscious customers.

Explanation: Companies who thread a cost-leadership strategy or path could be said to be 'price-centric', that is gives price huge cognizance and will strive to be a market or industry leader when it comes to giving best and most affordable prices on products.

Thus, since Airbase follows a cost leadership strategy and also popular among consumers for its affordable devices, it should also weigh or compare it's strategy to other consumer electronics company which is popular among consumers which gives cognizance to price of products they purchase.

5 0
3 years ago
One of the arguments in favor of trade restrictions is the foreign export subsidies argument.
svet-max [94.6K]
Trello!
it should be TRUE!
have a nice day :D

:>
3 0
3 years ago
The price of wheatwould be â$nothingper bushelif there was no price support. In order to maintain the priceâ support, the govern
horrorfan [7]

Answer:

$5, 200 bushels of wheat

Explanation:

From the diagram the price support was at $6 per bushel, however if the government removes the price support or if there was no price support, then the price of the wheat will be $5 for a bushel. And in order to maintain the price support, from the diagram below, it is expected that the government would have to purchase 200 bushels of wheat.

4 0
3 years ago
Other questions:
  • Malaysia and Laos are members of the same trading bloc that promotes trade and economic integration among member nations in the
    14·1 answer
  • What factors , other than tax incentives, should companies evaluate before deciding to invest in a particular country ?
    7·1 answer
  • Suki's salary is $1,200 per month. What is her yearly salary?
    7·2 answers
  • You will want to list your work content skills, functional skills, educational history, and work experience in your?
    11·2 answers
  • A decline in total real output for two or more consecutive quarters is referred to as
    13·1 answer
  • The table shows the federal government’s budgeted revenue and expenditures from 2001 through 2010. Identify the years in which t
    14·2 answers
  • Net worth is the difference between your assets and your liabilities
    5·1 answer
  • When inflationary pressure occurs, what is happening to the dollar?
    10·1 answer
  • F. Describe at least two examples of information the secondary source provided. (1-2
    9·2 answers
  • What is structurally different between starch and cellulose that gives them different physical properties?.
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!