Explanation:
The journal entry to record the estimated uncollectible accounts is shown below:
Bad debt expense Dr $7,500
To Allowance for uncollectible accounts $7,500
(Being the bad debt expense is recorded)
The computation is shown below:
= Estimated amount for uncollectible accounts - credit balance in allowance for uncollectible accounts
= $12,000 - $4,500
= $7,500
Answer:
I don't know but don't delete my answer pls
Explanation:)
Answer
the second choice is the better deal
Explanation:
Answer:
The WACC before bond issuance is 3.9% and the WACC after bond issuance is 3.71%
Explanation:
In order to calculate the WACC before bond issuance
, we would have to calculate first the cost of equity using capital asset pricing model
.
So Using CAPM we have Rf + Beta x Market risk premium
=
0.5% + 0.85 * 4%
= 3.9%
. cost of equity
Therefore WACC before bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= 3.9%
. WACC before bond issuance will be equal to cost of equity in this case as there is no debt issue.
In order to calculate the WACC after bond issuance we make the following calculation:
WACC after bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= (3.9% x 0.9) + (2% x 0.1)
= 3.51% + 0.2%
= 3.71%
