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xeze [42]
3 years ago
7

On the first day of the fiscal year, a company issues an $7,500,000, 8%, five-year bond that pays semiannual interest of $300,00

0 ($7,500,000 × 8% × ½), receiving cash of $7,740,000.
journalize the first interest payment and the amortization of the related bond premium. round to the nearest dollar. if an amount box does not require an entry, leave it blank.
Business
1 answer:
Sav [38]3 years ago
5 0

Answer:

$7,500,000 in 8% bonds, 5 years to maturity, semiannual coupon ($300,000)

sold at premium for $7,740,000

the journal entry to record the issuance should be:

Dr Cash 7,740,000

    Cr Bonds payable 7,500,000

    Cr Bond premium 240,000

<u>Using the straight line amortization:</u>

amortization per coupon payment = $240,000 / 10 coupons = $24,000

Dr Interest expense 276,000

Dr Bond premium 24,000

    Cr Cash 300,000

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Since bond market values are expressed as a percentage of their bond value, a $1,000 bond that is being sold at 93 would be trad
Sophie [7]

Answer: $930

Explanation:

From the question, we are informed that bond market values are expressed as a percentage of their bond value and are further told that a $1,000 bond that is being sold at 93.

Therefore, the bond will be trading at:

= $1000 × 93%

= $1000 × 0.93

= $930

5 0
3 years ago
Latoya as 50 shares of stock in ABC company worth $35.75 a share, a car worth about $5,600, and a collection of figurines worth
patriot [66]

Answer:

$ 9,387.50

Explanation:

An asset is any item that the owner considers valuable.

Shares , the cars and figurines are assets as Latoya can attach a value to them.

Total value of the shares = 50 x 35.75 = 1, 787.5

Value of the car = $5,600

Figurines = $ 2,000

Total value of assets = 1,787.50+ $5,600 + $2,000

=$ 9,387.50

8 0
3 years ago
A local county is considering purchasing some dump trucks for the trash pickups. Each truck will cost $55,000 and have an operat
lianna [129]

Answer:

35,972

Explanation:

The equivalent annual cost can be calculated dividing NPV by the annuity factor

In order to find NPV first

                                   Year1    Year2   Year3   Year4  Year5         Total

Operating and

Maintenance              18000 21000  24000  27000 30000          -

Discount factor(10%)  0.909   0.826   0.751   0.683   0.620           -

Discounted CFs          16362   17346  18024    18411   18600      88,713

Salvage                                                                          12000  

Discount factor(10%)                                                     0.620

Discounted salvage                                                      7440        (7440)

Inital Cost                   (55,000)                                                      (55,000)

NPV                                                                                                136,333

Calculation for EAC

NPV = 136,333

Annuity factor for 5 years = 3.790

Equivalent annual cost = NPV /Annuity factor

Equivalent annual cost = 136,333/3.790

Equivalent annual cost = 35,972

8 0
3 years ago
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abruzzese [7]
<span>If parts are replaced when you have work done on your vehicle,request the replaced parts be returned to you when you pick up your vehicle. We are replacing the parts for safeness of the vehicle which can avoid accidents due to old parts in the vehicle.Then we want to know which part is replaced so that for next time replacement it will be useful.Even replacements is of higher rate we don't want to risk our life and other's life.</span>
5 0
3 years ago
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Afina-wow [57]

True, usually the earlier you invest the more money you will get later down the road.  

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3 years ago
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