Answer:
The value per bond must be $1000
Explanation:
The reason is that the short term investments must be valued at current fair market value which is $1000 per bond today so the perceived value of the unit bond which is $1200 per bond is irrelevant here.
The amount recorded = Number of bonds * Current market value
The amount recorded = 250 * $1000 = $250,000
Answer:
Lowland, Inc., entry to record this conversion includes a
Dr Bonds Payable $900,000
Cr Common Stock $540,000
( 90,000 shares x $6 par value per share)
Cr Paid-In Capital in Excess of Par Value $360,000
($900,000 -$540,000)
Explanation:
Since Lowland, Inc. converted its $900,000 par value bonds and carrying value also $900,000) into 90,000 shares of $6 par value common stock which means we have to Debit Bonds Payable with $900,000 and Credit Common Stock with $540,000 which is
( 90,000 shares x $6 par value per share) , then Credit Paid-In Capital in Excess of Par Value for $360,000 which is ( value of bonds converted of $900,000 - par value of shares of common stock issued of $540,000).
When supplies of goods and service are plentiful, the prices usually drop but when they are scarce, prices start rising.
Answer:
(a) $921,100
(b) $643,500
(c) $567,700
Explanation:
(a) Cost of goods sold:
= Sales - Gross profit
= $1,261,800 - $340,700
= $921,100
(b) Direct Material Cost:
= Materials purchased - Indirect materials - Materials inventory
= $643,500 - $46,700 - $46,700
= $643,500
(c) Direct labor cost:
= Total manufacturing costs for the period - Direct materials - factory overhead (Indirect labor + Indirect materials + Other factory overhead)
= $1,393,000 - $643,500 - $181,800
= $567,700
Answer:
9.50%
Explanation:
There are the conditions in which the bond will sold at par, premium or even discount
When the bond will sold at par the yield to maturity and the coupon rate is equal plus the present value of the bond is equal to the face value of the bond
When the bond will sold at premium, the coupon rate is higher than yield to maturity
And, if the bond will sold at discount, the coupon rate is less than the yield to maturity
Since in the given situation, the companies wants to sell its bond at par i.e means the yield to maturity should be equal to the coupon rate i.e 9.50%
