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Delicious77 [7]
3 years ago
7

The effective interest amortization method: Multiple Choice Allocates bond interest expense over the bond's life using a changin

g interest rate. Allocates bond interest expense over the bond's life using a constant interest rate. Allocates a decreasing amount of interest over the life of a discounted bond. Allocates bond interest expense using the current market rate for each interest period. Is not allowed by the FASB.
Business
1 answer:
Alex_Xolod [135]3 years ago
5 0

Answer:

The correct option is B,allocates bond interest expense over the bond's life using a constant interest rate.

Explanation:

Assuming a bond was issued for $20,000,000 with stated interest rate(coupon interest rate) of 5% and yield to maturity of 7%,in calculating the bond interest expense,we simply apply the  yield to maturity of 7% to the bond outstanding balance in each year.

From the above, it is clear that the percentage applied to bond outstanding balance over relevant years remains the same,hence option B is absolutely correct

You might be interested in
Which one of the following types of losses is excluded from the determination of net income in income statements? Material losse
alexgriva [62]

Answer: The correct answer is "Material losses resulting from correction of errors related to prior periods.".

Explanation: It is generally established that the type of loss that is excluded from the determination of net income in the income statement are the material losses resulting from transactions in the company's investments account.

7 0
3 years ago
Eleni's landscaping company placed two orders. *The first order was for 13 bushes and 4 trees and totaled $487. *The second orde
Maksim231197 [3]

Answer:

Price of One Bush is $ 23

Explanation:

Suppose

bushes = B

trees = T

According to given condition:

13B + 4T = 487 (Eq: 1)

6B + 2T = 232 (Eq: 2)

Multiplying (Eq: 2) by 2

12B + 4T = 464 (Eq: 3)

Substractign (Eq: 3) from (Eq: 1)

13B + 4T - (12B + 4T) = 487 - 464

13B + 4T - 12B - 4T = 23

B = 23

By putting value of B in (Eq: 1)

(13 x 23) + 4T = 487

299 + 4T = 487

4T = 487 - 299

4T = 188

T = 188 / 4

T = 47

Price of One Bush = B = 23

5 0
3 years ago
For the doctrine of promissory estoppel to​ apply, which of the following is NOT a required​ element? A. the promisor should hav
erik [133]

Answer:

C) there was an​ offer, acceptance, and consideration

Explanation:

The doctrine of promissory estoppel requires that the following 5 elements must exist:

  1. The parties must anticipate that some type of legal relationship will exist between them.
  2. One party must have made a promise to another party.
  3. One party must rely on the promise made by the other party.  
  4. The party that relied on the promise made by the other party must suffer a detriment if the promise is not fulfilled.
  5. Unconscionability , in other words, there is nothing that forbids the party from performing the promise.
3 0
3 years ago
A company has two departments and allocates all overhead costs based on department revenues. The following information applies:
mixas84 [53]

Answer:

425,000

Explanation:

I'm not sure I just added the two together?

7 0
3 years ago
Becky only eats out at Macaroni Grill and eats out three times per month. She receives a raise from $31,000 to $33,500 and decid
GalinKa [24]

Answer:

6.45 and luxury good

Explanation:

The computation of the income elasticity of demand using the mid point formula is shown below:

= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in income ÷ average of income)  

where,  

Change in quantity demanded is

= Q2 - Q1

= 5 - 3

= 2

And, average of quantity demanded is

= (5 + 3) ÷ 2

= 4

Change in income is

= P2 - P1

= $33,500 - $31,000

= $2,500

And, average of price would be

= ($33,500 + $31,000) ÷ 2

= $32,250

So, after solving this, the income elasticity of demand is 6.45 and it represent the luxury good as it is greater than one

4 0
3 years ago
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