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3 years ago

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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3 years ago

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The contribution margin ratio is 25% for Crowne Company and the break-even point in sales is $260,000. If Crowne Company's targe

AlekseyPX

Answer:

sale is $4000

Explanation:

given data

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solution

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put here value

$260,000 = Fixed Expenses ÷ 25%

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3 years ago

an analyst gathered the following data about a company: 1,000 common shares are outstanding (no change during the year). net inc

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<h3>What is Diluted Earnings per share?</h3>

A metric known as "diluted EPS" is used to assess how well a company's earnings per share (EPS) would perform if all convertible securities were exercised. The entire circulating supply of convertible preferred shares, convertible debentures, stock options, and warrants are considered convertible securities. Take a company's net income to determine diluted EPS.

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2 years ago

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3 years ago

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