Answer : The total bond interest expense to be recognised over the bond's life is $217,600.
We arrive at the answer as follows:
In the question above, the face value of the bond is $640,000. We <u>do not</u> consider the issue price of the bond while computing interest on the bond.
The coupon rate on the bond is 8.5%.
The bond is a four-year bond.
Substituting these values in the equation above we get,
The issue price of the bond depends on prevailing market rates (12%). Since the market interest rate is greater than the coupon rate, investors will not invest in the bond unless they also receive a return of at least 12%. So, the bond is sold at a price lesser than face value - $570,443, in order to make the bond issue attractive to the investors.
These market values are not used while computing the total interest expense on the bond.
The other inspiring realizations that helped Andrew Feld to come up with the idea for his startup, Fresh Patch, were as follows:
- <u>Idea:</u> His pet gave him some idea that he could build a patch bathroom to enable his dog to ease whenever nature comes calling. When he tried it out with the dog and saw the success, he engaged his need for income to start marketing the product to others.
- <u>Necessity:</u> Since he was unemployed with a pregnant wife, he realized that he could do something with his time. This made him to try the bathroom for dogs idea that his pet needed. He needed some income to cater for his family.
- <u>A Big Vision:</u> The other realization is that the first year could be tough and will-breaking. Then, he also realized that a big vision could be realized if one works hard at it.
Thus, these realizations greatly helped Andrew Feld for his startup, Fresh Patch.
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It established a better economy in introduction to central banks (monetary policy)
If the fed buys $1 million in government securities from bank a, then the immediate effect of this transaction is an increase in Bank A's excess reserves
The word bank has many meanings. Apart from things related to money such as savings banks and piggy banks, banks are also grass and dirt slopes such as riverbanks.
Banks, institutions that trade money and its substitutes and provide other money-related services. In their function as financial intermediaries, banks accept deposits and authorize loans.
Steal the key. A bank is a financial institution authorized to accept deposits and make loans. There are different types of banks such as retail banks, commercial banks, and investment banks. In most countries, banks are regulated by central governments or central banks.
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The type of audit that occurs at your home or in the business is called the field. It is because the field is the place like home or business in which the IRS goes to in means of conducting the investigation in regards with them and their tax payer.
