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Vitek1552 [10]
3 years ago
9

On January 1, 2017, when the market interest rate was 14%, Luba Corporation issued bonds

Business
1 answer:
Anton [14]3 years ago
4 0

Answer:

the bond discount = face value - market value

market value = PV of face value + PV of coupon payments

PV of face value = $500,000 / (1 + 7%)²⁰ = $129,209.50

PV of coupon payments = $30,000 x 10.594 (PV annuity factor, 7%, 20 periods) = $317,820

market value = $447,029.50

January 1, 2017, bonds are issued at a discount

Dr Cash 447,029.50

Dr Discount on bonds payable 52,970.50

    Cr Bonds payable 500,000

the discount amortization for first coupon payment = ($447,029.50 x 7%) - $30,000 = $31,292 - $30,000 = $1,292

July 1, 2017, first coupon payment

Dr Interest expense 31,292

    Cr Cash 30,000

    Cr Discount on bonds payable 1,292

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f the interest rate is 7.8% per year, approximately how long will it take for your money to quadruple in value? (Use the Rule of
kondaur [170]

Answer:

The rule of 72 establishes that, to determine the time in which an investment will double its initial capital through the generation of compound interest, 72 must be divided by the interest rate number of said financial investment.

In the present question, the interest rate is 7.8%, with which the investment would double in 9.23 years (72 / 7.8 = 9.23).

Now, at the same time there will be an annual inflation of 4.9%, that is, an accumulated inflation of 45.22% (4.9 x 9.23 = 45.22). In other words, the real growth of investment will not be 100%, but the accumulated inflation will have to be discounted from said number, with which the real growth of investment will be 54.88% over those 9.23 years.

6 0
3 years ago
What is the current value of a future sum of money called?
Mashcka [7]
It seems that you have missed the necessary options for this question, but anyway, the correct answer for this would be PRESENT VALUE. The current value of a future sum of money is called a present value. Hope this is the answer that you are looking for. Have a great day!
4 0
3 years ago
EB1.
olya-2409 [2.1K]

Answer:

34,000 units

Explanation:

Given that,

Budgeted sales = 32,000 units

Ending inventory required = 6,000 units

Beginning inventory  = 4,000 units

Hence,

Number of units = Budgeted sales + Ending inventory - Beginning inventory

Number of units = 32,000 units + 6,000 units - 4,000 units

Number of units = 34,000 units

Therefore, 34,000 units must be produced to also meet the 6,000 units required in ending inventory.

3 0
2 years ago
THREE government regulations that guides the establishment and operation of a business.
algol [13]
Labor, privacy, and health
4 0
2 years ago
Lake Incorporated purchased all of the outstanding stock of Huron Company paying $967,000 cash. Lake assumed all of the liabilit
stich3 [128]

Answer:

Goodwill is $262,800

Explanation:

Goodwill is the excess of purchase consideration over fair value of net assets

Fair value of net assets is the fair value of total assets minus fair value of total liabilities

Fair value of total assets=$124,200+$757,000=$881,200

fair value of total liabilities=$177,000

fair value of net assets=$881,200 -$177,000=$704,200

Goodwill=purchase consideration-net assets

purchase consideration is $967,000

fair value of net assets  $704,200

goodwill=$967,000-$704,200

goodwill=$262,800

The correct option is the third option in the multiple choices

3 0
3 years ago
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