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makvit [3.9K]
3 years ago
14

Kelly Company issued $100,000 of 5%, 10-year bonds at 102 to a single investor. Each of the $1,000 bonds was convertible into 10

0 shares of no par common stock. The bonds were later converted when the remaining unamortized premium was $1,000. What is the amount that Kelly will credit to Common Stock when recording the conversion of the bonds?
Business
1 answer:
Angelina_Jolie [31]3 years ago
3 0

Answer:

The amount credited to common stock upon conversion of the bonds is $101000

Explanation:

When the bond was issued there would been a debit of $102000($100000*$102/$100) to cash account and credit of $102000 to liabilities split into $100000 bonds payable and $2000 bond premium.

However, on conversion to common stock with premium of $1000 outstanding in the books,the amount to be credited into common stock account is the issue value less outstanding premium.

The amount credited to common stock=$102000-$1000=$101000

This can be shown with entries below:

Dr Bond payable     $100000

Dr Bond premium    $1000

Cr Common stock                      $101000

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ivann1987 [24]

Answer:

7.52%

Explanation:

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pmt is the amount of annual coupon payment which is $106

pv is the current price of the bond at $860

fv is the face value of the bond at $1000

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The yield to maturity on the new issue is 12.54%  as well

after-tax cost of debt=pretax cost of debt*(1-t)

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5 0
3 years ago
For a recent year, Best Buy reported sales of $42,410 million. Its gross profit was $9,690 million. What was the amount of Best
LiRa [457]

Answer:

The amount of Best Buy's cost of goods sold was $32,720 million

Explanation:

cost of goods sold = sales - gross profit

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Insurance companies negotiate discounts with hospitals under a(n) Question 10 options: PPO. HMO. EPI. FYI.
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This is further explained below.

<h3>What are Insurance companies?</h3>

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Answer:

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2. Increases

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Explanation:

As per the data given in the question,

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