Answer: B. a 2 point capital gain
Explanation:
Municipal Bonds have to be amortized using the straight-line method and this applied to both newly issued or bonds being traded at a premium.
The bond in question is trading at 105 and so has a 5 point premium which needs to be amortized at 1 point a year for 5 years. As it was bought after two years, the amortization was 2 points which means the cost of the bond should be;
105 - 2 = 103
Yet it was sold for 105. The gain is therefore
= 105 - 103
= 2 point capital gain
Answer:
B. a debit to Interest Expense for $ 42 comma 750.
C. a credit to Cash of $ 137 comma 750.
Explanation:
Payment of Note Payable includes the payment of interest on the outstanding balance and principal amount of the note. In this question it is the first payment of the note payable, so the outstanding balance is the face value of the note, Interest is calculated using this value, A fix payment of $95,000 is also made.
As per given data
Principal Payment = $95,000
First Interest payment = $475,000 x 9% = $42,750
Total Payment = $95,000 + $42,750 = $137,750
Journal Entry for first payment
Dr. Interest Expense $42,750
Dr. Not Payable $95,000
Cr. Cash $137,750
Answer:
Realizing the contrast among cost and worth can expand benefit: the expense of your item or administration is the sum you spend to deliver it. the cost is your money related award for giving the item or administration. the worth is the thing that your client accepts the item or administration is worth to them
Explanation:
.
