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Anit [1.1K]
3 years ago
14

Suppose that you want to construct a 2-year maturity forward loan commencing in 3 years. The face value of each bond is $1,000.

Maturity (Years) Price 1 $ 983.16 2 893.39 3 830.92 4 769.40 5 664.94 a. Suppose that you buy today one 3-year maturity zero-coupon bond. How many 5-year maturity zeros would you have to sell to make your initial cash flow equal to zero?
Business
1 answer:
Alex3 years ago
3 0

Answer:

=830.92/664.94=1.249616507

Explanation:

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Following are selected transactions Danica Company for 2014:
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Answer:

Explanation:

Answer:

On Dec 31, 2012 Lee's liability would be $9,500 (principal amount) and $38 (accrued interest)

Explanation:

Lees notes:

Dec. 13 Accepted a $9,500, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable.

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Debit Miranda Lee with $9,538

Credit interest on Receivables $38

Credit Account receivables account with $9,500

When the full interest became due we will pass an additional entry:

Dr. Lee with $58

Cr. Interest on receivables with $58

(Being the balance interest on receivables due )

On Jan 27 when Lee paid her interest and principal amount, we will:

Debit Account receivables with $9,500

Debit interest on receivables Account with $95

Credit Tomas account with $9,595

( being liquidation of Lee's indebtedness)

Tomas notes:

Mar 3, Accepted a $5,000, 10%, 90-day note dated March 3 in granting a time extension on the past-due account receivable of Tomas Company.

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$5,000 x 10% x 90/360 = $125

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Debit Tomas with $5,125

Credit interest on receivables with $125

Credit Account Receivables account with $5,000

On June 1 when Tomas paid his interest and principal amount, we will:

Debit Accounts receivable with $5,000

Debit interest on receivables with $125

Credit Tomas account with $5,125

( being liquidation of Tomas indebtedness)

Hiroshi Cheng notes:

Accepted a $2,000, 30-day, 9% note dated March 17 in granting Hiroshi Cheng a time extension on his past-due account receivable.

Interest = $2,000 x 9% x 30/360 = $15

The entries recognizing this liability will be to :

Debit Cheng Account with $2,015

Credit interest on receivables with $15

Credit Accounts receivable with $2,000

(Being receivables payable balance and interest on balance owed by Cheng)

However Cheng failed in paying up. It was decided to write off the debt.

The entries would be:

Dr. Accounts receivables $2,000

Dr. Interest on Accounts receivables with $15

Cr. Cheng's Account with $2,015

(Being debt owed by Cheng written off)

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Answer:

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Explanation:

I got it correct

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Read 2 more answers
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