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Nastasia [14]
3 years ago
11

Due to the impact that sudden events could have in the value of bonds, event risk covenants, or provisions, are included in the

issuance of some corporate bonds. This provision allows investors to turn in their bonds to the issuer and get the value equal to the par value in order to protect investors against rising rates. Such a bond is called .
Business
1 answer:
Natalka [10]3 years ago
4 0

Answer:

A puttable bond.

Explanation:

According to the corporate finance institute, "A puttable bond (put bond or retractable bond) is a type of bond that provides the holder of a bond (investor) the right, but not the obligation, to force the issuer to redeem the bond before its maturity date.   Puttable bonds are directly opposite to callable bonds."

A puttable bond (put bond, putable or retractable bond) has an embedded put option, giving the bondholder the right, but not the obligation, to demand early repayment of the principal, with the put option exercisable on one or more specified dates.

It is a kind of protection offered to investors so that they could "turn in their bonds to the issuer and get the value equal to the par value."

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Hayward Company, a manufacturing firm, has supplied the following information from its accounting records for the month of May:
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Answer:

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3 years ago
With the start of each new era in japan, the country's capital changed locations. why?
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2 years ago
During the year, Bears Inc. recorded credit sales of $620,000. Before adjustments at year-end, Bears has accounts receivable of
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Answer:

Bad Debt Expense Dr. $28050        

Allowance for Uncollectible accounts Cr. $28050

Explanation:

given data

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accounts receivable = $320,000

past due = $55,000

credit balance = $2,600

rate = 7 %

rate = 22 %

solution

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and

past due = $55,000

so  Required provision is

Required provision = $265,000 × 7 % + $55,000 × 22 %

Required provision = $30650

and

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so

Required expense for year = $30650 - $2,600

Required expense for year  = $28050

so here

correct entry is

Bad Debt Expense Dr. $28050        

Allowance for Uncollectible accounts Cr. $28050

8 0
3 years ago
Suppose the benefit of owning a painting, in terms of your personal enjoyment, is worth 5% of the value of the painting. If the
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Woodwick Company issues 9%, five-year bonds, on December 31, 2014, with a par value of $96,000 and semi-annual interest payments
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Answer:

A) The issuance of bonds on December 31, 2016.

Dr Cash 104,031

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Dr Premium on bonds payable 803

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C) The second interest payment on December 31, 2017.

Dr Interest expense 3,517

Dr Premium on bonds payable 803

    Cr Cash 4,320

4 0
3 years ago
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