Answer:
c. Ml would decrease; there would be no change in M2
Explanation:
M1 is one of the narrowest definition of money supply, M1 is defined as the currency held by the public plus demand deposits or checkable deposits balances.
M2 is a wider definition of money stock than M1. It is important to note that M2 is a combination of m1 plus time deposits.
If Ann converts some of her checkable deposits into a certificate of deposit, this action will decrease the balance in M1 because checkable deposits is a component of M1. But M2 will not change because M2 is a composition of both M1 and time deposit (i.e. certificate of deposit), it will only means a reclassification within the same class.
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Answer and Explanation:
The journal entry is given below:
Cash (11,000 × $28) $308,000
To Paid-in Capital from Treasury Stock $77,000
To Treasury stock (11,000 × $21) $231,000
(Being the recording of 11,000 shares sale is done)
Here the cash is debited as it increased the assets and credited the treasury stock and additional paid in capital as it also increased the stockholder equity
D'anthony borrowed $ 50,000, which is the principal amount.
The repayment was $5,000 per year therefore after 15 years he will have paid a total of 15 × $ 5000 = $75,000.
Therefore, the interest accrued will be $75,000 - $ 50,000 = $ 25,000
By calculation interest is given by principal × rate×time
hence, rate = interest ×100 / principal × time
= 25,000 ×100 / 50,000 ×15
= 3.333%
Therefore, the rate of interest was 3.33% per annum