1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Rainbow [258]
2 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]2 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

You might be interested in
Billings Company has the following information available for September 2017.
kumpel [21]

Answer:

Part a

Contribution Margin = 29.95% (2 d.p)

Part b

                             Billing Company

                 CVP Income for as at September 2017

                                                      Total                      Per Unit

                                                         $                               $

Sales                                          295704                       444

Less Variable Costs                  (138084)                      (311)

Contribution                               157620                        133

Fixed Costs                                 (59850)                     89.86

Net Income                                  97770                       43.14

Part c

Billing`s break even point is 450 units

Part d

                                    Billing Company

     CVP Income for as at September 2017 - Break Even Point

                                                      Total                      Per Unit

                                                         $                               $

Sales                                           199800                       444

Less Variable Costs                  (139950)                      (311)

Contribution                                59850                        133

Fixed Costs                                 (59850)                      133

Net Income                                       0                              0

Explanation:

Part a

Contribution Margin = Contribution/Sales × 100

Therefore contribution margin is  ($444-$311)/$444 * 100 = 29.95% (2 d.p)

Part b

Sales - Variable Cost = Contribution

Net Income  =   Contribution - Total Fixed Costs                            

Part c

Break Even Point is when Billings neither makers a profit or loss.

Break Even Point ( Units) = Total Fixed Cost/Contribution per unit

Therefore Break Even Point (Units) = $59850/$133 = 450 units

Part d

The total and unit CVP should neither reflect a profit or loss at a capacity of 450 units as this is the break even point. In this case profit = nill

7 0
3 years ago
I need to figure out the owners equity ! HELP
motikmotik

Owners equity is $82365 - $70500 which gives $11365. Therefore when you add $70500 + $11365, this would give $82365.

4 0
3 years ago
Rational choice theorists would define the behavior of corporate executives who outsource many jobs to countries where the cost
STALIN [3.7K]

Answer: Instrumental

Explanation:

Rational choice theory, is a school of thought which is based on the assumption that individuals will choose a course of action which goes in line with what they personally prefer.

For the instrumental rationality, it has to do with looking for the most cost effective method in order to achieve a particular objective. Therefore, the behavior of corporate executives who outsource jobs to other countries where labor cost is cheaper than in the United States is defined as being instrumental.

8 0
3 years ago
Assume that there is no way to prevent someone from using an interstate highway, regardless of whether or not he or she helps pa
Katena32 [7]

Assume that there is no way to prevent someone from using an interstate highway, regardless of whether or not he or she helps pay for it. This characteristic is associated with <u>Public goods</u>

Explanation:

Public goods are also known as non-exclusionary goods. This means that no one can be left out from the collective use of the goods for not paying to use it. These goods are meant for collective good. Some of the examples include roads, health, parks to name a few.

An Interstate highway maintained by a state authority is open for all its citizen. Since there is no way a state can prevent anyone from using it based on their payment it qualifies for the characteristic of being a public good.

7 0
3 years ago
using the scenarios in case exhibit 9, what role does leverage play in affecting the return on equity (roe) for cpk? what about
motikmotik

Using the scenarios in case exhibit 9, Leverage will always lead to an increase in the total rate of return in the equity because leverage will be increasing the interest tax Shield due to which it can be seen that the total market value of the company has increased with a higher amount of debt capital.

The cost of capital is generally decreasing with a higher amount of leverage as there will be benefits associated with interest tax shield.

It can be noticed that when a high amount of leverage is used by the company, it is eventually leading to a higher amount of market value for the company as well so higher leverage is leading to a higher amount of market value for the company so leverage is directly related to increases in the market value as high amount of leverage will be increasing the total market value.

Leverage is an investment strategy that uses borrowed money (specifically, the use of various financial instruments or borrowed capital) to increase the potential return on investment. Leverage can also refer to the amount of debt a company uses to fund its assets.

Leverage is the amount of debt a company has in its debt-equity combination (capital structure). A company with more debt than the industry average is considered highly leveraged. The definition of leverage is the act of leverage or force to influence a person, event, or thing. An example of a lever is the action of a seesaw. An example of leverage is being the only person running for class president. noun.

Learn more about  Leverage here

brainly.com/question/3966216

#SPJ4

6 0
1 year ago
Other questions:
  • At the start of football season, the ticket office gets very busy the day before the first game. Customers arrive at the rate of
    8·1 answer
  • Complete the table by calculating the surplus or deficit both in absolute (dollar) terms and as a percentage of gdp. if necessar
    5·2 answers
  • the theme song from the movie jaws is an example of using sound for what purpose? dialogue heightening scene’s setting conveying
    5·2 answers
  • Supermodel Linda Evangelista has been quoted as saying. "l] don't wake up for less than $20,000 a day." If Ms. Evangelista is pa
    5·1 answer
  • Donna Company makes three types of products. The company has two types of customers. The cost to serve all customers is $12,000
    12·1 answer
  • Will gie 5 starz thank and braiest
    7·2 answers
  • During 2019, $27,000 of cash dividends were declared and paid. A patent valued at $80,000 was obtained in exchange for land. Equ
    8·1 answer
  • What is the safest way to make sure you are using a copyrighted image fairly? A. Do a Google image search. B. Save the image to
    8·1 answer
  • In a cohesive group, group members have a degree of dependence on the group. A. True B. False
    9·1 answer
  • porter’s competitive strategies outline four different generic corporate strategies. this activity is important because knowledg
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!