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Olenka [21]
3 years ago
7

Now discuss with suitable examples how the issue price of bonds payable is determined? When does the issue price results in a di

scount issue or a premium issue? What are the two methods of amortization of bonds discount/premium and how they are different from each other? What are the accounting issues when bonds payable are issued between the interest dates and when bonds payable are extinguish?
Business
1 answer:
nordsb [41]3 years ago
4 0

Answer:

How the issue price of bonds payable is determined?

The issue price is the Present Value of the Bond which is calculated by taking thee following into account:

1. Periods to Maturity

2. Maturity Value

3.Coupon Payments

4.Yield to Maturity

When does the issue price results in a discount issue or a premium issue?

<u>Discount issue</u>

When the Coupon Rate is less than the Market Rate

<u>Premium issue</u>

When the Coupon Rate is greater than the Market Rate

Two methods of amortization of bonds discount/premium

1. Effective Interest method

2. Normal Interest and Payment method

Accounting issues when bonds payable are issued between the interest dates and when bonds payable are extinguish?

1. Difficulty in compounding the interest rate or yields to maturity.

2. Use of wrong yield to maturity

Explanation:

Each requirement of this question is explained above.

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The intensity of competition is greater in declining industries in which: a. the product is easy to differentiate. b. exit barri
Oksi-84 [34.3K]

Answer:

b. exit barriers are high

Explanation:

Declining industries are those industries wherein the industry has saturated and experiences a negative growth. The characteristic of such industries being the products are lesser in demand.

For instance, cassettes and magnetic tapes industry was in demand until the arrival of more advanced forms such as compact discs and usbs, post which those industries turned into declining industries.

A declining industry with high barriers to exit would experience a greater competition since the barriers would encourage competition instead of withdrawal. And with higher costs of withdrawal, the firms continue producing at negative growth.

4 0
3 years ago
At March 1,2020, Candy inc. Had supplies on hand of $500. During the month Candy purchased supplies of $1200 and used supplies o
solong [7]

Answer: The March 31 adjusting journal entry shoud include $1200

Explanation: Given that the

Supplies on hand = $500

Candy purchased supplies of $1200 and used supplies of $500

The unused supplies will be:

1200 - 500 = 700 dollars

The March 31 adjusting journal entry shoud include the addition of the supplies on hand and the unused supplies. That is,

500 + 700 = 1200 dollars

8 0
3 years ago
Mr. Able wants to set up a tax-deductible fund to be used to support young talented individuals to enhance their abilities. What
Gre4nikov [31]

Answer:

Mr. Able have to open a Private Foundation to set up a Tax-deductible fund.

Explanation:

  • They will exclude donations up to 30 per cent to 60 per cent of our income, based on the charity's existence and tax-exempt status.
  • You will state your expenses to assert a charitable deduction on your tax return.
  • Private foundation contributions are tax deductible up to 30 percent of the adjusted gross benefit for assets and up to 20 percent of the income for assessed shares, with a five-year hold forward.

therefore Mr Able must donate his funds

8 0
3 years ago
PLEASE HELP ME I AM TIMED WILL MARK BRAINLIEST!!!!!!!!!!
prisoha [69]

Answer:

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Explanation:

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2 years ago
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