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sergeinik [125]
3 years ago
9

On January 1, ABC, Inc., issued $100,000 of 10%, 5-year bonds, for $92,280. Interest is due semiannually. When ABC records the f

irst interest payment, which will be greater the debit to Interest Expense or the credit to Cash?
A.The debit to Interest Expense will be greater because the market rate is greater than the stated interest rate.

B.The debit to Interest Expense will be less because the market rate is greater than the stated interest rate.

C.The debit to Interest Expense will be greater because the market rate is less than the stated interest rate.

D.The debit to Interest Expense will be lower because the market rate is less than the stated interest rate.
Business
1 answer:
Rina8888 [55]3 years ago
5 0

Answer:

A. The debit to Interest Expense will be greater because the market rate is greater than the stated interest rate.

Explanation:

The effective interest rate is the market rate which is real rate of interest payment after incorporating the compounding effect. When the effective interest rate is greater than the stated the bond will sell at discount. The stated interest rate determines the amount of interest borrower will have to pay. The effective interest rate lead to higher returns than stated interest rate.

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Prepare the necessary general journal entries for the month of October for Crane Retail for each situation given below. Crane us
harkovskaia [24]

The necessary journal entries for October month are attached below in the image :

<h3>What do you mean by journal entries?</h3>

All company transactions are documented in journal entries. Generally speaking, a transaction is any financial activity that has an effect on a business.

All the necessary journal entries are attached below:

Learn more about journal entries:

brainly.com/question/13483463

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3 0
2 years ago
Which is a result of frequent change requests from client?
barxatty [35]

Answer:

D. project completion constraints

Explanation:

project completion constraint can be described as condition that influence the action or set of action that are involved in the completion of the project team, and this result in frequent change requests from client.

These could be time, cost and scope.

Therefore, among the given options, option D is correct.

8 0
3 years ago
Kalons, Inc. is a U.S.-based MNC that frequently imports raw materials from Canada. Kalons is typically invoiced for these goods
pantera1 [17]

Answer:

The correct answer is C) purchase Canadian dollar put options.

Explanation:

A sale option (or put option) gives its holder the right - but not the obligation - to sell an asset at a predetermined price until a specific date. The seller of the option to sell has the obligation to buy the underlying asset if the holder of the option (buyer of the right to sell) decides to exercise his right.

The purchase of put options is used as hedging, when price falls are anticipated in shares that are held, since by means of the purchase of Put the price is established from which money is earned. If the stock falls below that price, the investor earns money. If the share price falls, the profits obtained with the sale option compensate in whole or in part for the loss experienced by said fall.

Losses are limited to the premium (price paid for the purchase of the sale option). Earnings increase as the share price falls in the market.

5 0
2 years ago
Bristlebird Corporation (E&amp;P of $700,000) has 3,000 shares of common stock outstanding. Juan owns 1,500 shares and his wife,
Schach [20]

Answer:

The correct answer is

Juan has dividend income of $250,000.

good luck ❤

6 0
3 years ago
The unlevered cost of capital is: Group of answer choices the cost of preferred stock for a firm with equal parts debt and equit
Dennis_Churaev [7]

Answer: The cost of capital for a firm with no debt in its capital structure.

Explanation:

Leverage in finance refers to the use of debt. Unlevered capital therefore would refer to capital that is without debt which means that an unlevered cost of capital is one with no debt in its capital structure.

Companies with such a capital structure derive their capital 100% from Equity and as such do not pay interest. This means however, that they will not benefit from the tax shields that interest payments offer.

5 0
2 years ago
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