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kumpel [21]
3 years ago
11

Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2016. Company manag

ement has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2016 was $210 million.
Required:

1. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2016.

2. Prepare the journal entry by Tanner-UNF to record interest on December 31, 2016, at the effective (market) rate.

3. At what amount will Tanner-UNF report its investment in the December 31, 2016, balance sheet? Why?

4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2017, for $190 million. Prepare the journal entry to record the sale.
Business
1 answer:
Arte-miy333 [17]3 years ago
8 0
I don’t know what you’re telling me to do here! Where’s the question ?
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irga5000 [103]

Answer:

$4,300

Explanation:

Calculation for what amount should Nelson report for total ending inventory on its Dec. 31 balance sheet

Total ending inventory=( 200*3.50)+(400*1.50)+ (1,000*3.00)

Total ending inventory=$700+$600+$3,000

Total ending inventory=$4,300

Therefore the amount that Nelson should report for total ending inventory on its Dec. 31 balance sheet will be $4,300

4 0
3 years ago
Select the correct answer.
yuradex [85]

Answer:

Option B  

Explanation:

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5 0
3 years ago
At the beginning of the year, Rangle Company expected to incur $54,000 of overhead costs in producing 6,000 units of product. Th
Stells [14]

Answer:

$35,400

Explanation:

The total cost is the sum of the direct and indirect costs. The direct cost is made up of the direct material and direct labour costs. The indirect cost or overheads is a cost to be apportioned based on the estimated total for the year and the units produced during the period

Total direct cost for January = 600 ($20 + $30)

= $30,000

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The total cost of the units made in January was

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7 0
4 years ago
You write one MBI July 139 call contract (equaling 100 shares) for a premium of $17. You hold the option until the expiration da
Bogdan [553]

Answer:

$600 loss

Explanation:

A call option is defined as a contract that exists between ba buyer and seller of a call option to exchange securities held at a particular price within a specific period.

To calculate the profit realised on the investment

Profit from call option= (150- 139) * 100

Profit from call option= $1,100

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Profit from premium= $1,700

Profit on investment= Profit from call option - Profit from premium

Profit on investment = 1,100 - 1,700 = -$600

So there is a loss of $600

4 0
3 years ago
Read 2 more answers
Dalia prefers the numbers in her excel document to show up as dollar amounts like “$5,234.15” instead of as numbers like “5234.1
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Answer:

"5,234.15" is the most useful way

4 0
3 years ago
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