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cluponka [151]
2 years ago
10

Trew Company plans to issue bonds with a face value of $902,000 and a coupon rate of 6 percent. The bonds will mature in 10 year

s and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1). Determine the issuance price of the bonds assuming an annual market rate of interest of 7.5 percent.
Business
1 answer:
Agata [3.3K]2 years ago
5 0

Answer:

$807,992

Explanation:

issue $902,000 with a 6% semiannual coupon and 10 year maturity. coupon payment = $27,060

if the annual market interest rate = 7.5%, the bonds should be sold at a discount:

issue price = present value of face value + present value of interest payments

  • present value of face value = $902,000 / (1 + 3.75%)²⁰ = $431,961
  • present value of annuity = $27,060 x {1 - [1 / (1 + 3.75%)²⁰]} / 3.75% = $376,031

issue price = $431,961 + $376,031 = $807,992

the journal entry should be:

Dr Cash 807,992

Dr Discount on bonds payable 94,008

    Cr Bonds payable 902,000

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Answer:

B. Floor Broker

Explanation:

Floor brokers on the Chicago Board Options Exchange ( CBOE ) accept orders from member firms for execution. Orders are filled under an open outcry auction system in the trading "pits."

Market makers maintain bid and ask quotes in options contracts.

Order book officials maintain the book of public orders that cannot be immediately filled.

4 0
3 years ago
what is the relationship between the securities and exchange chommisison and accounting standard setting in the united states
zlopas [31]

Complete Question:

What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?

A) The SEC requires all companies listed on an exchange to submit their financial statements to the SEC.

B) The SEC coordinates with the AICPA in establishing accounting standards.

C) The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.

D) The SEC reviews financial statements for compliance.

Answer:

C) The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.

Explanation:

Accounting principle can be defined as a general guideline to be followed by accountants or financial institutions when they record and report their financial transactions.

The Securities and Exchange Commission (SEC) is a governmental agency saddled with the sole responsibility of regulating the securities or capital markets, as well as protecting investors in a country.

In the United States of America, the Securities and Exchange Commission (SEC) as an independent government agency was established under the Securities Act of 1933 and the Securities and Exchange Act of 1934 of the United States of America. It has the power to propose securities rules and regulations, and enforce federal securities law in the securities market.

GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC).

IFRS is an acronym for International Financial Reporting Standards, it comprises of a set of accounting standards or rules issued by the International Accounting Standards Board (IASB). The International Financial Reporting Standards ensures that statement of income, when reported by accountants is consistent, transparent and comparable globally.

Hence, the relationship between the Securities and Exchange Commission and accounting standard setting in the United States is that, The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.

3 0
2 years ago
Alex owns an event management company. His customer service strategy should______ focus on valuing customers for the growth of t
grigory [225]

Answer:

The correct answer is: "D. Both external and internal".

Explanation:

The only possible answer to fill in the space is letter D because it is reasonable to think that a company should focus both on external and internal values for customers in order to make it grow for both parts. As it is an event management company, it is very important to highligh the external demands and how they come and go with clients, agencies, and subsidiaries, while the company must take care of their internal customers who are more responsable for maintaining their strategy going on properly.

6 0
3 years ago
Rearden Metals is considering opening a strip mining operation to provide some of the raw materials needed in producing Rearden
melomori [17]

Answer:

The correct answer is C.

Explanation:

Giving the following information:

The initial purchase of the land and the associated costs of opening up mining operations will cost​ $100 million today. The mine is expected to generate​ $16 million worth of ore per year for the next 12 years. At the end of the 12th year Rearden will need to spend​ $20 million to restore the land to its original pristine nature appearance.

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Number of years= 100,000,000/16,000,000= 6.25 years

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0.25*365= 95 days

It will take 6 years and 95 days to recover the initial investment.

5 0
3 years ago
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V125BC [204]
AFC mean average fixed costs. This is equal to total fixed costs divided by the amount of output. If the output is equal to 1000, then the AFC is

AFC = $250.00 ÷ 1,000
AFC = $ 0.25

I hope I was able to answer your question. Thank you and have a good day.
6 0
3 years ago
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