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kodGreya [7K]
3 years ago
13

A corporation issues $92,000, 8%, 5-year bonds on January 1, for $96,140. Interest is paid semiannually on January 1 and July 1.

If the corporation uses the straight-line method of amortization of bond premium, determine the amount of bond interest expense to be recognized on July 1.
Business
1 answer:
PilotLPTM [1.2K]3 years ago
5 0

Answer:

$3,266

Explanation:

First we must calculate the total amount received as bond premium:

$96,140 - $92,000 = $4,140

This should be amortized over 10 periods (= 5 years x 2 semiannual payments), so we must amortize $414 per period.

The coupon that the company pays = $92,000 x 8% x 1/2 = $3,680

So the interest to be recognized is = $3,680 - $414 = $3,266

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$3,484.85

Explanation:

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Using this formula

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Let plug in the formula

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Tax-equivalent value=$2,300/.66

Tax-equivalent value=$3,484.85

Therefore A nontaxable employee benefit with a value of $2,300 would have a tax-equivalent value of:$3,484.85

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3 years ago
On December 31, there were 46 units remaining in ending inventory. These 46 units consisted of 6 from January, 8 from February,
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$6,734

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Using the specific identification method, the cost of the ending inventory is: 734 + 1064 + 1430 + 1224 + 2282 = $6734

4 0
2 years ago
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You are the manager of a firm that receives revenues of $40,000 per year from product X and $90,000 per year from product Y. The
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B) High, low

Firms and brands that continually attempt to operate in the  <u>HIGH</u> price / <u>LOW</u>  benefits quadrant do not survive over the long run as customer  trust is Damaged.

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Many times new products have a very short life because companies believe that they can charge very high prices because they are innovations, but they forget to provide the corresponding benefits of a very high price. Usually short living fads result from this strategy, because the customers will demand more for their money and if the product doesn't satisfy them, they wouldn't purchase it again. And with all the social networks we have today, gossip (and videos) about bad products travel extremely fast.

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