Answer:
please Elaborate like how much money do you have or something
Answer:
Debit Insurance expense $10,000
Credit Prepaid Insurance $10,000
Being entries to recognize insurance expense for the period (August to December).
Explanation:
Given;
Insurance policy was purchased on July 10 to run for 3 years.
Cost of policy = $72,000
Start date is August 1st. As at 31 December, the policy should have been amortized for 5 months (August to December)
Monthly depreciation = $72,000/(3 × 12)
= $2,000
Total amortization between August and December = 5 × $2,000
= $10,000
Journal entries
Debit Insurance expense $10,000
Credit Prepaid Insurance $10,000
Being entries to recognize insurance expense for the period (August to December).
Answer:
9.73%
Explanation:
the market value of equity = 10,000,000 stocks x $15 = $150,000,000
the market value of debt = 40,000 bonds x $1,150 = $46,000,000
total = $196,000,000
weight of equity = 0.7653
weight of debt = 0.2347
Re = 3.5% + [1.35 x (0.115 - 0.055)] = 0.035 + 0.081 = 0.116
cost of debt = ytm = {36.25 + [(1,000 - 1,150)/40]} / [(1,000 + 1,150)/2] = (36.25 - 3.75) / 1,075 = 32.50 / 1,075 = 0.03023 x 2 = 0.0605
after tax cost of debt = 0.0605 x (1 - 40%) = 0.0363
WACC = (0.116 x 0.7653) + (0.0363 x 0.2347) = 0.09729 = 9.73%
