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Mila [183]
3 years ago
13

On the first day of the fiscal year, a company issues an $949,000, 9%, five-year bond that pays semiannual interest of $42,705 (

$949,000 x 9% x 1/2), receiving cash of $892,100. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method. If an amount box does not require an entry, leave it blank.
Business
1 answer:
KonstantinChe [14]3 years ago
7 0

Answer:

Bond issue price                                                    $892,100

Face value                                                              $949,000

Discount on bond                                                   $56,900

Number of Interest payments (10 years x 2)          10

Discount to be amortized per payment                $5,690

Interest on bond                                                    $51,210

Date        Description                               Debit        Credit

Dec.  31 Bond interest expense             $56,900

              Discount on bonds payable                      $5,690

              Cash                                                           $51,210

              (Interest on bond paid and Premium amortized)

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The following table lists all costs of quality incurred by Sam's Surf Shop last year. Annual inspection costs Annual cost of scr
Alborosie

Answer:

$707,000

Explanation:

Calculation for Sam's appraisal cost for quality last year

Using this formula

Appraisal cost = Annual inspection costs + Annual testing cost

Where,

Annual inspection costs =$172,000

Annual testing cost=$535,000

Let plug in the formula

Appraisal cost = $172,000 + $535,000

Appraisal cost = $707,000

Therefore Sam's appraisal cost for quality last year will be $707,000.

3 0
3 years ago
When a parent uses the equity method throughout the year to account for its investment in an acquired subsidiary, which of the f
Roman55 [17]

Answer: The correct answer is "C. Parent company total assets equals consolidated total assets".

Explanation: The statement "C. Parent company total assets equals consolidated total assets" is false before making adjustments on the consolidated worksheet when a parent uses the equity method because the parent company total assets are not equal to consolidated total assets.

7 0
3 years ago
A 65-year-old retiree wishes to convert the cash value of his insurance policy into an annuity. He can select an annuity that wi
insens350 [35]

Answer:

The annual difference between Option 1 (15 years) and Option 2 (20 years) is $7,211.19 in favor of the first one.

Explanation:

Giving the following information:

Option 1:

Number of years= 15

FV= 450,000

i= 0.0525

Option 2:

Number of years= 20

FV= 450,000

i= 0.0525

To calculate the annual cash flow, we will use the following formula on each option:

A= (FV*i)/{[(1+i)^n]-1}

A= annual cash flow

<u>Option 1:</u>

A= (450,000*0.0525) / [(1.0525^15) - 1]

A= $20,464.72

<u>Option 2:</u>

A= (450,000*0.0525) / [(1.0525^20) - 1]

A= $13,253.53

The annual difference between Option 1 (15 years) and Option 2 (20 years) is $7,211.19 in favor of the first one.

5 0
3 years ago
When companies recruit people to promote products to friends and other contacts in exchange for free samples or other​ rewards,
barxatty [35]

Answer:

The answer is: Referral marketing

Explanation:

Referral marketing is like word of mouth marketing, but with a reward.

We are all social creatures, some more than others, and we like to tell our friends about things that might be considered interesting, new, good, etc (a little gossip). We also know by now that advertisement is usually not 100% accurate, so we don´t fully trust it. When one of our friends tells us that they tried product X and it was great, we do trust them and probably will end up buying product X.

4 0
4 years ago
John Fare purchased $6,000 worth of equipment by making a $1000 down payment and promising to pay the remainder of the cost in s
vesna_86 [32]

Answer:

C $ 596.39

total payment          7,156.68

Interest expense     2,156.68

Explanation:

6,000  -  1,000 = 5,000 amount to finance

We will calcualte the cuota of an annuity of 6 years with semianual payment at 12% annual rate.

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV  $5,000.00

time   12 (6 years times 2 payment per year)

rate            0.06 (12% annual we divide by 2 to get semiannual)

5000 \times \frac{1-(1+0.06)^{-12} }{0.06} = C\\

C $ 596.39

The total amount paid will be the cuota times the time of the loan:

Total amount paid

596.39 x 12 = 7,156.68‬

The interest will be the difference between the total amount paid and the principal of the loan

Interest paid

total payment          7,156.68

principal                 (5,000)

Interest expense     2,156.68

7 0
3 years ago
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