Answer:
Interest paid in cash in 2018 = $0
Interest recognized on the Income statement = $1,800
Liabilities recognized = $90,000
Amount paid for Principal and interest = $93,600
Interest reported on 2019 Income statement = 1800
Explanation:
Interest paid in cash in 2018 is zero because interest and principal were paid in cash on the maturity date.
Interest recognized in 2018 = 90000*0.08*3/12 = $1800
liabilities are recognized at original amount because the interest is not capitalized and no payment made thus far.
Amount paid on maturity date is 93,600 ( 90000 principal, 3600 interest)
interest reported is for three months jan - march
Answer:
$700
Explanation:
If a bond is issued at a lower price than the face value of the bond, then the bond is issued on the discount. This discount is amortized over the bond's life. This amortization will be expensed as Interest Expense.
Discount = Face value - Issuance price = $15,000 - $14,700 = $300
Bond's Life = 6 years
Amortization of discount = $300 / 6 = $50 annually = $25 semiannually
Coupon Payment = Face Value x coupon Rate = $15,000 x 9% = $1.350 annually = $675 semiannually
Interest Expense Includes both the coupon payment and discount amortization for the period.
Interest Expense = $675 + $25 = $700
Answer:
Appalachian Beverages
The Updated current ratio is:
= 1.65
Explanation:
a) Data and Calculations:
Current assets = $39,900
Current ratio = 1.90
Current liabilities = $21,000 ($39,900/1.90)
Current Assets:
Beginning balance = $39,900
Inventory $5,100
Cash ($2,000)
Ending balance = $43,000
Current Liabilities:
Beginning balance = $21,000
Accounts Payable $5,100
Ending balance = $26,100
Analysis of Transactions:
1. Inventory $5,100 Accounts Payable $5,100
2. Delivery Truck $10,000 Cash $2,000 Two-year Note Payable $8,000
Updated current ratio = Current assets/Current liabilities
= $43,000/$26,100
= 1.65
Answer:
$1,000,000
Explanation:
Gallagher Corporation
Stock option × Option estimated fair value /Numbers of years
Stock option $400,000
Option estimated fair value $10
Numbers of years 4
Hence:
($400,000 × $10) / 4 years
=$4,000,000/4years
= $1,000,000
Therefore pretax compensation expense for year 1 will be $1,000,000
