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Rainbow [258]
3 years ago
15

Tanner-UNF Corporation acquired as a long-term investment $240million of 6% bonds, dated July 1, on July 1, 2018. The marketinte

rest rate (yield) was 8% for bonds of similar risk and maturity.Tanner-UNF paid $200 million for the bonds. The company willreceive interest semiannually on June 30 and December 31. Companymanagement is holding the bonds in its trading portfolio. As a result ofchanging market conditions, the fair value of the bonds at December31, 2018 was $210 million.Part 1: Prepare the journal entry to record Tanner-UNFâs investment inthe bonds on July 1, 2018.Investment in Bonds 240.0Discount on Bond Investment 40.0Cash 200.0
Business
1 answer:
horrorfan [7]3 years ago
8 0

Answer:

Journal Entry

01 July Debit Investment $240 million Credit Bank $200 million Credit Discount on investment $40 million

31 Dec Debit Bank $7,2 Million Debit Discount on Bond $0.8 million Credit Interest Income $8 million

Debit Fair Value loss on investment $30 million Credit Investment $30 million

Explanation:

Interest is received semiannually

6%/2 = 3%

interest = $240 million * 3% =7,200,000

8%/2 = 4%

Interest market $200 million * 4% =8,000,000

Fair value loss = 240 million - 210 million

                        = 30 million loss because cost is greater than fair value

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Luden [163]

Answer:

the last part of the question is missing, so I looked for it:

a. Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.

b. Randy had no investment income this year, and his AGI is $75,000.

a) Randy can deduct $31,575:

  • the mortgage interest is deductible
  • the car loan interest is not deductible
  • he can deduct $4,725 - $2,200 = $2,525 as investment interest expense

b) Randy can deduct $29,050

  • the mortgage interest is deductible
  • the car loan interest is not deductible
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5 0
3 years ago
Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry abou
sattari [20]

Answer:

The formula to calculate the Budget Balance is

Government Income - Government Expenditure

in this case

$1.05 billion - $1.06 billion = -<u> 0.01 billion or - $100 million</u>

Explanation:

A budget balance is reached when a government expenditures are equal to it's income.

In this case, since the country's only source of income it is slightly less than than what is required to run the government, it has a budget deficient.

Since the country does not export or trade with outside countries, the government will need to take out a loan to make up for this deficient.

5 0
3 years ago
Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 w
VikaD [51]

Answer:

                                                             Dr.            Cr.  

Work in progess                              139,000

Salaries and wages payable account                139,000

Explanation:

Direct Labor are charges to work in progress account and a payble is created as a result.

Total Labor cost = $212,000

Indirect cost = $73,000

Direct labor cost = $212,000 - 73,000

Direct labor cost = $139,000

3 0
2 years ago
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A company has employed two workers A and B whose productivities are 20units and 15units respectively. The wage for A is k12 whil
Leni [432]

Answer:

no

Explanation:

In order to achieve optimal employment level, the ratio of productivity between employees must be equal to the ratio between their wages, e.g. an employee who is 25% more productive, should earn 25% more.

In this case, the productive ratio is 15:20 or 3:4, while the wage ratio is 8:12 or 2:3. Since the wage ratio is lower than the productivity ratio (2:3 < 3:4), the two employees are not optimally employed.

3 0
3 years ago
Your career test results revealed you are naturally optimistic and very accepting of other's differing perspectives. you are gen
USPshnik [31]
Hello!

I don't really understand the question.. Sorry if this doesn't help!

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