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ololo11 [35]
3 years ago
11

On January 1, 2019, Ola Company paid $388,900 for a $400,000 face value 3% corporate bond yielding 4%, interest paid annually on

December 31, and classified it as held-to-maturity. Ola's reporting year ends December 31. On its 2019 income statement, Ola reports interest revenue on the corporate bond of: A. $12,000 B. $15,556 C. $11,667 D. $16,000
Business
1 answer:
shutvik [7]3 years ago
8 0

Answer:

B. $15,556

Explanation:

As given in the question

Face value of bond = $400,000

Carrying value of bond = $388,900

Discount from par value = $11,100

Coupon rate = 3%

Bond yielding rate = 4%

Interest revenue for the year = Carrying value of bond x Bond yielding rate

Interest revenue for the year = 388,900 x 4%

Interest revenue for the year = $15,556

The correct option is B. $15,556.

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Lem Co., which accounts for treasury stock under the par value method, acquired 100 shares of its $6 par value common stock for
In-s [12.5K]

Answer:

Additional paid in capital decrease by 100 as a result of the acquisition

Explanation:

Treasury Stock 600 (100 shares x $6)

Additional Paid-In Capital 100 (100 shares x $1)

cash 1,000 (100 shares x $10)

Additional Paid-In Treasury Stock 300

7 0
3 years ago
Suppose that in the second year her average total cost per dog is $35 and that $20 of that is associated with the variable cost.
jok3333 [9.3K]

Answer:

She should stay open, because the revenue of from dog grooming ($30 per dog), is still high enough to cover her variable cost of $20 per dog, even though she is operating at a loss.

Explanation:

Profit = Revenue - Total costs

Total costs = Fixed costs + variable costs

Profit = $30 - $35 = -$5 per dog

This shows she is operating at a loss of $5 per dog.

If a company does not make enough revenue to cover its total costs, then it is operating at a loss.

However such a company must consider its variable cost before deciding whether to shut down.

A company should only shut down if it is unable to make enough revenue to cover its variable cost.

If a company is operating at a loss but can at least cover its variable cost, then it should stay open at least in the short run.

6 0
3 years ago
What has happened to China’s GPD since it began to reform its economy?
telo118 [61]

Answer:

it has grown substantially

Explanation:

in the past, China's government has total control over other economy. They failed to run it efficiently since the system provide no incentives for people to work harder and invents new things.

In the 1980s, china started to adopted some aspect of Capitalism and let the private sector grow their influence in the economy.

As a result, many people start to have incentives to contribute more to the economy. This system  basically allowed the citizens seek personal wealth for themselves, but they are indirectly improving the country's economy.

6 0
3 years ago
A country is said to have a _______ exchange rate when the government keeps the exchange rate against other currencies at or nea
77julia77 [94]

Answer:

Fixed

Explanation:

The government keeps the exchange rate FIXED the the same rate.

3 0
3 years ago
The​ full-employment level of employment​ is: A. the level of employment when aggregate demand is equal to​ short-run aggregate
natita [175]

Answer:

The correct answer is letter "C": the equilibrium level of employment reached after all wages and prices have fully adjusted.

Explanation:

Full Employment is a situation in which all available human resources are utilized at their highest degree. Each worker is in a job where that worker has his or her more productive use and benefit to the aggregate economy. Full employment is usually achieved in a robust economy when employment reaches its equilibrium point after wages and price adjustments, but can potentially be achieved in any economy.

5 0
3 years ago
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