Answer and Explanation:
a) Discount:
Carrying Value:$106,554
Face Value:($118,000)
Discount:($11,446)
Calculate Gain/Loss:
Carrying Value:$106,554
Redemption Price:($120,360)
[118,000*102]
Loss:(13,806)
April 30 2022
Dr Bonds Payable $118,000
Dr Loss on Redemption $13,806
Cr Discount on Bonds Payable $11,446
Cr Cash $120,360
(Record retirement of bond at loss.)
(b)Calculate Premium:
Carrying Value:$271,021
Face Value:($250,400)
Premium:$20,621
Calculate Gain/Loss:
Carrying Value:$271,021
Redemption Price:($240,384)
[$250,400*96]
Gain$30,637
June 30, 2022
Dr Bonds Payable $250,400
Dr Premium on Bonds Payable $20,621
Cr Gain on Redemption $30,637
Cr Cash $240,384
(Record retirement of bond at gain.)
I think that statement would be false
The term <span>"spontaneously generated funds" generally refers to funds that a firm must raise externally.
The way they did this is could either by:
- issuing a bond payable and promise to pay up an interest rate in return
- Sell out their ownership of the company in the form of stocks.</span>
Answer:
1071.76875
Explanation:
24,375/1000=24.375
24.375x43.97=1071.76875
I dont know a thing about buisness but I like math so I hope this is correct
the awnser to the problem is true.
Answer:
b. One year from now, Bond A’s price will be higher than it is today
Explanation:
Bond A has 7% annual coupon
Bond B has 9% annual coupon
YTM (market rate) 8%
Bond A yield for less than market market thus, they will be offered below ther face value to make it more profitable.
Bond B yield above market rate therefore; investors will accept to pay higher than face value up to yield market rate.
Both bonds, will move towards face value in the future as at maturity both will pay 1,000 regardless of the coupon payment and market rate.
<u>We can conclude then:</u>
<em>Bond A is below 1,000 dollars one year from now will be closer from this value thus; higher value.</em>
