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stepan [7]
3 years ago
15

Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $240,000 of 10-year, 9

% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.
Journalize the entries to record the following selected transactions for the current year.

May 1 Issued the bonds for cash at their face amount.
Nov. 1 Paid the interest on the bonds.
Dec. 31 Recorded accrued interest for two months.
Business
1 answer:
34kurt3 years ago
5 0

Answer:

Thomson Co.

Journal entries:

May 1:

Debit Cash Account $240,000

Credit Bonds Payable $240,000

To record the issue of 10-year, 9% bonds at face value.

Nov. 9:

Debit Interest on Bonds $10,800

Credit Cash Account $10800

To record the payment of 6-months interest.

Dec. 31:

Debit Interest on Bonds $3,600

Credit Interest on Bonds Payable $3,600

To record two-months interest accrued.

Explanation:

The journal entries made by Thomson Co. are to record the bond transactions.  For example, when the bonds were issued, cash was received.  This transaction gives rise to a debit to the Cash Account that received the value and a credit to the Bonds Payable Account that gave the value.  The bonds payable account represents the liability that is contracted by the bonds issue.  Recording these transactions in the journal show their effects on the accounting equation that requires assets to be equal to liabilities and owner's' equity following each transaction.

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4 0
3 years ago
Your bank card has an APR of 18% and there is a 2% fee for cash advances. The bank starts charging interest on cash advances imm
Marina86 [1]

Answer:

$42

Explanation:

APR = 18% , month rate = 18%/12 = 1.5%

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Cash advance of the first day of month = $1,200

Finance charge = Cash advance * (Monthly rate + Advance cash fee)

Finance charge = $1,200*1.5% + $1,200*2%

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4 0
3 years ago
The common stock of Zeta Group sells for $42 per share, has a rate of return of 12.2 percent, and a dividend growth rate of 1.8
Soloha48 [4]

Answer:

The amount of the last annual dividend paid is <u>$4.3</u>.

Explanation:

Given:

The common stock of Zeta Group sells for $42 per share, has a rate of return of 12.2 percent, and a dividend growth rate of 1.8 percent annually.

Now, to find the amount of last annual dividend paid.

Let the amount of last annual dividend paid be l.

Price of per share (p) = \$42.

Rate of return (r) = 12.2\%.

Rate of dividend growth (g) = 1.8\%.

Now, to get the amount of last dividend paid we put formula:

p=\frac{l(1+g)}{r-g}

42=\frac{l(1+1.8\%)}{12.2\%-1.8\%}

42=\frac{l(1+0.018)}{0.122-0.018}

42=\frac{l\times 1.018}{0.104}

<em>Multiplying both sides by 0.104 we get:</em>

<em />4.368=1.018l<em />

<em>Dividing both sides by 1.018 we get:</em>

4.3=l

l=\$4.3.

Therefore, the amount of the last annual dividend paid is $4.3.

6 0
3 years ago
Which of the following items is not a temporary difference? A. Vacation pay accrued for tax purposes in a prior period is deduct
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Answer: the correct answer is B. Tax depreciation for the period exceeds book depreciation.

3 0
3 years ago
A strong internal control system will reduce the amount of substantive testing that must be performed.A ) True B ) False
Doss [256]

Answer:

A) True

Explanation:

The internal control structure deals with the rules, laws, procedures, practices that vary from company to company that are necessary to attain an organization's goals and objectives.

The substantive testing is an audit process aimed at checking the accuracy and reliability of the financial statements. To check if the financial statements are free from any errors, mistakes, fraud, etc. that can change users' decisions.

The financial statements should be relevant, reliable and finalize in all respects.

Therefore, a strong internal system will reduce the quantity of substantive testing required.

4 0
3 years ago
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