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Aleonysh [2.5K]
2 years ago
15

On January 1, 2018, Legion Company sold $270,000 of 4% ten-year bonds. Interest is payable semiannually on June 30 and December

31. The bonds were sold for $146,125, priced to yield 12%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2018, in the amount of
Business
1 answer:
RSB [31]2 years ago
6 0

Answer:

$8,767.50

Explanation:

Calculation for what Legion should report as bond interest expense for the six months ended

Using this formula

Bond interest expense= Carrying Value of Bond x Effective interest rate

Let plug in the formula

Bond interest expense=$146,125 x 12% yield interest x 6 months/12 months

Bond interest expense=$8,767.50

Therefore what Legion should report as bond interest expense for the six months ended is $8,767.50

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The condition when a payment cap is applied and the required payment does not cover the interest expense, the unpaid interest is added to the loan thereby increasing the loan balance even though the required payment is being made, is known as a negative amortization.

<h3>What is negative amortization?</h3>

A condition where the amount owed by an individual keeps adding even after the repayments are done is known as negative amortization.

Such condition of a negative amortization arises as the amount being repaid does not fully or partly cover the interest amount.

Hence, the significance of negative amortization is aforementioned.

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6 0
1 year ago
Multi-product branding is:_______.
Elan Coil [88]

Answer:

b. a branding strategy in which a company uses one name for all of its products in a product class.

Explanation:

Multi-product branding is a branding strategy in which a company uses one name for all of its products in a product class.

Multi-product branding is a business strategy widely used by manufacturers, it involves producing and selling multiple products using the same brand name for all.

For instance, Pears may have Pears diapers, clothing lines, lipstick ranges, shoes, body lotions, eye shadow, foundation etc. They are all different products manufactured and all branded as Pears.

The merits and advantages of Multi-product branding is high brand awareness, low promotional and advertising costs, and brand equity return.

8 0
3 years ago
The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the
Gekata [30.6K]

Answer:

a. amount of the other good that must be given up.

Explanation:

The mix of two goods or services can be accomplished in the frontier of production possibilities when all available resources and technologies are fully efficient and used. This indicates a mix of the two resources to a maximum.  

As we know that, the opportunity cost refers to the cost in which the best alternative is chosen among the available ones which can generate a better return so the one goods are considered while another cost is given up.

5 0
3 years ago
Suppose you have $100 of endowment, and you are offered a chance to buy a lottery which costs $36. The lottery has 43% of chance
Yuliya22 [10]

Answer:

96.02

Explanation:

Lottery's Expected utility = \sqrt{100} = 10

Income in good state = 100 - 36 + G = 64 + G

Income in bad state = 100 - 36 = 64

Probability in good state = 43%

Probability in bad state = 100% - 43% = 57%

Expected utility = Probability in good state x \sqrt{(64 + G )} + Probability in bad state x \sqrt{64\\}

10 = 43% x \sqrt{(64 + G )} + 57% x 8

10 = 43% x \sqrt{(64 + G )} + 4.56

10 - 4.56 = 43% x \sqrt{(64 + G )}

5.44 = = 43% x \sqrt{(64 + G )}

5.44 / 43% = \sqrt{(64 + G )}

12.65 = \sqrt{(64 + G )}

12.65^{2} = (\sqrt{(64 + G )})^{2}

160.0225 = 64 + G

G = 160.0225 - 64

G = 96.0225

G = 96.02

6 0
3 years ago
A producer of mobile aerial work platforms rewards employees for the number of basic skills they can perform rather than for the
evablogger [386]
The company uses skill-based pay. The skill-based pay is the most widely-implemented salary system, in which the salary is defined based the knowledge, experience, education or specialized training of the employee. <span>The greater the number or depth of skills an employee acquires and applies the bigger the pay. </span>
5 0
3 years ago
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