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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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The U.S. Bureau of Economic Analysis​ (BEA) has recently adopted a new approach to calculate real GDP and real GDP growth to cor
pashok25 [27]

One of the features of the new approach is​ that, now BEA uses the geometric average of fixed weight indexes and uses two base years to calculate the growth rate of real GDP between two consecutive years.

Explanation:

In both actual and nominal GDP, the U.S. Economic Analysis Department results. It estimates the real United States. GDP is a fixed base year annual rate. Imports and international sales from American businesses and people are exempt.

GDP reflects the degree to which the economy generates production. Global warming is not generated and not part of GDP. The effect of environmental damage is not measured accurately. The loss should not be included in GDP and the calculation of environmental damage has not been accepted.

3 0
3 years ago
Currency held outside banks is $200 billion, money market mutual funds (retail) are $10 billion, small-denomination time deposit
ratelena [41]

Answer:

M2 = $470 billion.

Explanation:

M2 = Currency + Money market mutual fund + Time deposits + Saving deposits

M2 = 200 billion + 10 billion + 40 billion + 220 billion

M2 = $470 billion.

M2 is a calculation of the money supply that includes all elements of M1 as well as "near money"

3 0
3 years ago
Discuss which financial management practices are least effective in creating and monitoring an operating budget.
Vinil7 [7]

Top down/bottom up budgets, lack of control, poor inventorying, lack of staff investment, over control are the least effective financial management practices in creating and monitoring an operating budget.

The operating budget includes the expenditures and revenues generated by the company's daily business functions. The operating budget focuses on operating expenses, such as the cost of goods sold in the market, also known as the cost of sold goods (COGS), and revenue or income. COGS is the cost of direct labor and direct materials used in the production process.

The operating budget also includes overhead and administration costs that are directly related to manufacturing goods and providing services. However, capital expenditures and long-term loans will not be included in the operating budget. Budgets for sales, production process or manufacturing, labor, overhead, and administration are a few examples of frequently utilized operating budgets.

Learn more about operating budget here:

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6 0
2 years ago
In August, one of the processing departments at Tsuzuki Corporation had beginning work in process inventory of $24,000 and endin
Ipatiy [6.2K]

Answer:

b. $307,000

Explanation:

Costs to be accounted in cost reconciliation report = Opening balance of work in process + Cost of production added during the month

= $24,000 + $283,000

= $307,000

Cost reconciliation report shows what costs need to be accounted for in a month and the manner in which they are actually accounted for.

It is a step in preparation of production report which shows how beginning work in process inventory and the costs which are added to production during the period are recorded.

Hence in cost reconciliation report pertaining to the month of Aug, opening work in process and costs added to production during the month are recorded.

3 0
3 years ago
Television advertisements aired during major sporting events are very expensive. A theory asserting that people buy a product si
Diano4ka-milaya [45]

Answer:

a. enhances the effectiveness of the advertisement.

Explanation:

Television advertisements aired during major sporting events are very expensive. A theory asserting that people buy a product simply because it is advertised would suggest that information on the high cost of advertising enhances the effectiveness of the advertisement.

The main aim and objectives of advertising is to increase sales and profit of a business, thus, ads would help to reach out to the target audience and create brand awareness but often it comes with a price.

7 0
3 years ago
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