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melamori03 [73]
3 years ago
10

Megginson, Inc. issued a five-year corporate bond of $300,000 with a 5% interest rate for $290,000. What effect would the bond i

ssuance have on Megginson, Inc.'s accounting equation
Business
1 answer:
andriy [413]3 years ago
6 0

Answer:

Megginson, Inc.

Effect of the Bond Issuance on Megginson, Inc.'s accounting equation:

(The account equation states that Assets = Liabilities + Equity.)

With the bond issuance, the Assets (Cash) will increase by $290,000 and the Liabilities (Bonds Payable) will increase by $300,000, and there will be a loss (Equity - Retained Earnings) of $10,000 in the form of Discount on Bonds.  This discount on bonds is usually amortized over the bonds' life, thus increasing the interest payable.

Explanation:

The issuance of bonds is one of the means of obtaining finance for business operations.  It is a long-term borrowing, which entities use to finance the activities when funds cannot be sourced from other sources or when it is considered cheaper to borrow from outside sources.

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A 5-year corporate bond yields 9.70%. A 5-year municipal bond of equal risk yields 6.5%. Assume that the state tax rate is zero.
Roman55 [17]

Answer:

c. 32.99%

Explanation:

Risk yield = bond yield*(1 - Federal tax rate)

    6.50% = 9.70%*(1 - Federal tax rate)

1 - Federal tax rate = 6.50%/9.70%

Federal tax rate = 1 - 6.50%/9.70%

                           = 32.99%

Therefore, The federal tax rate that you are indifferent between the two bonds is 32.99%

3 0
2 years ago
What question is asked along the horizontal axis of the markets-and-technology framework?
Julli [10]

The question that is asked along the horizontal axis of the markets-and-technology framework is, Does the innovation build on existing technologies or create new ones?

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By the use of era, we can broaden the era-related functionality and also can integrate it with other technologies. but the framework is a set of libraries as a way to provide a scratch-level implementation using one or extra technology and also offers first-class lessened improvement time.

The technology framework is based totally on the idea that generation is an aid and the generation base of a company represents the technological information that wishes to become products, approaches, and offerings through technological capabilities advanced via effective TM.

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4 0
1 year ago
A dilemma challenging the existing structure of the European Central Bank​ (ECB) has been brought on​ by: Part 2
bearhunter [10]

defining and implementing monetary policy. conducting foreign exchange operations. holding and managing the euro area's foreign currency reserves. promoting the smooth operation of payment systems.

<h3>What is foreign currency reserves?</h3>

Foreign Exchange Reserves are cash and other reserve assets, such as gold, held by a central bank or other monetary authority and used primarily to balance a country's accounts, influence the foreign exchange rate of its currency, and maintain financial market confidence.

Foreign exchange reserves are a country's emergency funds in the event of an emergency, such as a rapid depreciation of its currency. Countries use foreign currency reserves to maintain a fixed rate of value, maintain competitively priced exports, remain liquid in the event of a crisis, and provide investors with confidence.

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brainly.com/question/25812353

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5 0
1 year ago
When comparing contracts in common law and civil law systems, it can be said that:________ a. contracts drafted under a civil la
blagie [28]

Answer:

d. contracts drafted under a common law system tend to be longer than those drafted under a civil law system.

Explanation:

Common law can be defined as a set of unwritten laws which are primarily based on precedent court decisions, tribunal decisions and customs and are usually employed in similar court judgments and rulings that cannot be determined by existing statutes.

On the other hand, civil law can be defined as a set of law which regulates private or personal matters such as family matters, marriage, property, contracts etc.

When comparing contracts in common law and civil law systems, it can be said that contracts drafted under a common law system tend to be longer than those drafted under a civil law system because the drafters of contracts under civil law are able to rely on codified and standard default rules.

4 0
2 years ago
A producer of mobile aerial work platforms rewards employees for the number of basic skills they can perform rather than for the
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The company uses skill-based pay. The skill-based pay is the most widely-implemented salary system, in which the salary is defined based the knowledge, experience, education or specialized training of the employee. <span>The greater the number or depth of skills an employee acquires and applies the bigger the pay. </span>
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