Julius and Rachel have formed a valid contract because Rachel's outward expression showed the formation of a contract. A valid contract is an expressed agreement between two parties to produce a product or service. The essential elements of a valid contract are: an offer, an acceptance, an intention to create a legal relationship and a consideration, usually in form of money.<span />
Answer:
$575
Explanation:
The computation of the depreciation expense is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($2,500 - $200) ÷ (4 years)
= ($2,300) ÷ (4 years)
= $575
In this method, the depreciation expense is the same for all the remaining useful life i.e for four years, the $575 should be charged for all four years
Answer:
The issue price of the bond is $ 487,598 as calculated in the attached
Explanation:
The issue price of the bond is the present value of the future cash flows payable by the bond.The discount factor with which to multiply the future cash flows to arrive at present value is modified by dividing the rate by 2 to show that interest is payable semi-annually and also by multiplying n, the number of years by 2 to indicate that the interest would now be paid at a time that doubles the original time horizon.
The formula for present value in the case is :FV/(1+10%/2)^n*2
In calculating the present of coupon interest received in the first six months,the coupon interest is calculated $520000*9%/2=$23400,then the present of this amount is gotten by multiplying $23400 with (1+10%/2)^1*2
Find detailed computation in the attached.
The par value of $520000 is added to the last interest as it payable then.
Answer:
$5,000
Explanation:
Since the payments are due semi-annually and the bond were issued on January 1, 2016 at 100, we will have to calculate the interest cash payments for the two semi-annuals in 2016. Therefore, the interest rate to use is the full annual 5% stated rate. Therefore, we have:
Interest cash payment = Bond face value × Interest rate
= 100,000 × 5%
Interest cash payment = $5,000.
Therefore, the cash interest payments in 2016 is $5,000.
