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Annette [7]
2 years ago
5

On June 30, year 8, Adonis Co. had outstanding 4%, $4,000,000 face value bonds, originally issued at 98, maturing on June 30, ye

ar 13. Interest was payable semiannually every June 30 and December 31. Adonis did not elect the fair value option for reporting its financial liabilities. On June 30, year 8, after amortization was recorded for the period, the unamortized bond discount and bond issue costs were $40,000 and $30,000 respectively. On that date, Adonis acquired all its outstanding bonds on the open market at 97 and retired them. At June 30, year 8, what amount should Adonis recognize as gain before income taxes on redemption of bonds
Business
1 answer:
Nataliya [291]2 years ago
3 0

Answer:

gain on redemption         110,000

Explanation:

bonds payable        4,000,000 debit

bond issuance cost      30,000 debit

      discount on bonds            40,000 credit

      cash                              3,880,000 credit

      gain on redemption          110,000 credit

<u>book value of the bonds:</u>

face value      4,000,000

discount             (40,000)

issuance cost  <u>    30,000   </u>

total                3,990,000

<u>acquisition value:</u>

4,000,000 x 97% = 3,880,000

redemption gain/loss

book value less redemption price

3,990,000 - 3,880,000 = 110,000 gain on redemption

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Answer:

Explanation:

The journal entries are shown below:

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(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

2. Cash A/c Dr $4,400         (100 shares × $44)

    To Common Stock $100      (100 shares × $1)

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(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)

6 0
3 years ago
postal express is considering the purchase of a new sorting machine. the sales quote consists of quarterly payments of $37,200 f
Cloud [144]

The five-year sales quote includes quarterly payments of $37,200 at a 7.6% interest rate. The price of the acquisition is $614,184.40.

<h3>Do you mean by PMT payment?</h3>

PMT stands for "payment," therefore the name of the function. A PMT method can estimate your monthly payments, for instance, if you are looking for a $30,000 car loan with a two-year term and an annual interest rate of 7%.

<h3>In the fv formula, what is PMT?</h3>

PV = present value, and FV=PMT(1+i)((1+i)N - 1)/i Future Value (FV) Payment per period (PMT) I = percent per period interest rate N is the number of cycles.

Quarterly Payment = PMT = $37,400

Interest Rates = r = 7.6% per year = 0.076 per year = 0.076 / 4 = 0.019 per quarter

Number of years = 5 years

Number of Payment = n = 5 years x 4 quarters per year = 20 quarters

PV = PMT x (1 - [1 / (1 +r)^n]) / r

PV = $37,200 x (1 - [1 / (1 +0.019)^20]) / 0.019

PV = $614,184.40

Learn more about PMT: brainly.com/question/12890163

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3 years ago
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6 0
2 years ago
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Answer and Explanation

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Adjusting journal entry to record bad debt expense is:

Particulars                                          Debit              Credit

Bad debts expense                            XXXXX

     Allowance for doubtful debts                               XXXXX

(Being bad debts incurred)

Noe, Allowance for doubtful debts has a credit balance of $4,800.

Bad debt incurred = 29,900 - 4,800 = $25,100

So adjusting entry :

Particulars                                          Debit              Credit

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     Allowance for doubtful debts                             $25,100

(Being bad debts incurred)

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