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Aneli [31]
4 years ago
14

Patrick Rach International issued 5% bonds convertible into shares of the company's common stock. Rach applies U.S. GAAP. Upon i

ssuance, Patrick Rach International should record:-The proceeds of the bond issue as part debt and part equity-The proceeds of the bond issue entirely as debt-The proceeds of the bond issue entirely as equity-The proceeds of the bond issue entirely as debt if the bonds are mandatorily redeemable
Business
1 answer:
Ludmilka [50]4 years ago
6 0

Answer:

The correct answer is letter "B": The proceeds of the bond issue entirely as debt.

Explanation:

Under the U.S. General Accepted Accounting Principles (<em>GAAP</em>) the issuance costs of bonds are ignored for reporting purposes but the amount of sales revenues is recorded as debt. The amortization of the bond can be calculated using the <em>effective interest method</em> or the <em>straight-line method</em>.

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Explain the law of one price and the theory of purchasing power parity. Why doesn't purchasing power parity explain all exchange
Masteriza [31]

Answer:

The law of one price establishes that the product or service price will remain the same for all the entire world.

Explanation:

The law of one price establishes that the product or service price will remain the same for all the entire world. It is necessary to take into account for this law that the price of the currency  needs to be also the same and that the price of the product or service would not be affected by other factors such as additional buyers or sellers in the market.

On the other hand the purchasing power parity refers to the idea of an equilibrium of currencies in exchange rates, it means that the power for purchasing will be represented in the same way in the different countries, and it is important to mention that this theory is base in the law of one price.

The  the long run equilibrium is an idea that in theory represents all the equilibrium of prices, quantities, and markets in general; on the other hand, for the short run equilibrium there are some limitations in which the market cannot be explained as properly and fully balanced.

6 0
4 years ago
Which explains the increase in the price of an item from $10 in 1980 to over $25 today?
Vikentia [17]
Inflation.
stagnation means to stay still, which it didn't. depression was before the 80's, our unemployment rate shouldn't really effect prices that drastically. 
7 0
3 years ago
Oriole Company has issued three different bonds during 2022. Interest is payable annually on each of these bonds. 1. On January
Solnce55 [7]

Answer:

Transaction 1

Debit : Cash  ($1,000 x 1,000) $1,000,000

Credit : Bond Payable  $1,000,000

Transaction 2

Debit : Cash  ($854,000 x 101.30%) $865,102

Credit : Bond Payable  $865,102

Transaction 3

Debit : Cash  ($281,000 x 99%) $278,190

Credit : Bond Payable  $278,190

Explanation:

On each issuance date recognize a cash inflow and a liability - Bond Payable to the extent of the amount paid on issue.

5 0
3 years ago
Selvig and Anzer, a military weapons manufacturer, is divided into different organizational units—the S&amp;A Logistics, which h
Marysya12 [62]

Answer:

departmentalization

Explanation:

The departmentalization is a means to organize the activities of the company, in order to facilitate the achievement of its objectives, it consists in the coordination in the combination and / or adequate grouping of the activities necessary for the organization in specific departments.

6 0
3 years ago
On June 30, Nance Company receives a $5,000, 90-day, 4% note from a customer as payment on her account. How much interest will b
DedPeter [7]

Answer:

50$

Explanation:

5000 x 4% x 90/360 = 50$

5 0
2 years ago
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