Answer: $880.57
Explanation:
Assuming Par value of bond is $1,000.
Value of bond = (Coupon * Present value interest factor of annuity, no. years, required return) + Par Value/ (1 + required return)^ no. of years
Coupon = 5% * 1,000 = $50
Value of bond = (50 * 5.9713) + 1,000 / (1 + 7%)⁸
= 298.565 + 582
= $880.57
Answer:
2.20
Explanation:
The Price elasticity will be:
Δdemand/ΔPrice
<u>The mid point is used to calculate the increases.</u>
Δdemand = ΔQ/midpointQ
(Q2+Q1)/2 = mid point quantity = (300+ 200)/2 = 250
ΔQ = 300-200 = 100
Δdemand = 100/250 = 0.4
<u>Same procedure is applied with the Price numbers:</u>
Δprice = ΔP/midpointP
(P2+P1)/2 = mid point price = (3+ 2.5)/2 = 2.75
ΔP = 2.5-3 = 0.5
Δprice = 0.5 / 2.75 = 0.181818
FInally we calculate the price elasticity:
Δdemand/ΔPrice
0.4/0.1818181818 = 2.2
Answer:
journal entry based on straight line method are given below
Explanation:
given data
issues = $570,000
rate = 8.5 %
time = 4 year
issued = $508,050
market rate = 12%
to find out
prepare journal entry
solution
journal entry based on straight line method
date general journal Debit Credit
June 30 bond interest expenses $31969
Discount on Bonds payable $7744
= (570000-508050 ) ÷ 8
Cash = 570000 × 8.5% ÷ 2 $24225
December 31 Bond interest expense $31969
Discount on Bonds payable $7744
= (570000-508050 ) ÷ 8
Cash = 570000 × 8.5% ÷ 2 $24225