The journal entry to record the accrual of interest includes:
- Dr. Interest Expense $5,000
- Cr. Interest Payable $5,000
<h3>What is an
accrual of interest?</h3>
This mean the interest which has been incurred for specific date on a loan but has not yet been paid out.
Here, the Accrued interest expense on 12/31/15 is paid on 1/1/16.
Based on the calculation, the journal entry to record the accrual of interest includes a Debit to Interest Expense for $5,000 and a Credit to Interest Payable for $5,000.
Missing words "On January 1, 2015, Candlestick, Inc. issues $100,000, five-year, 10% bonds at 100 (100% of face value). Assume that interest is payable semiannually on January 1 and July 1."
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Answer:
$
Sales (2,500,000 x$0.10) 250,000
Less: Material cost(2,500,000 x $0.03) 75,000
Annual lease rental <u>70,000</u>
Profit <u>105,000</u>
Explanation:
Profit equals annual sales minus material cost minus annual lease rental. Since the annual sales volume are 2,500,000 gloves at a price of $0.10 per pair, the total sales value will be $250,000. Material costs $0.03 per pair, thus, the total material cost will be $0.03 x 2500,000 pairs. Annual lease rental of $70,000 is treated as a fixed cost.
Answer:
Equipment $ 16,216 (debit)
Note Payable $ 16,216 (credit)
Explanation:
The Present Value of the Note is used as the measurement Cost of the Equipment
From this value we would subsequently calculate the depreciation as the equipment is being used.
The Note Payable will be amortised over three years to reflect the Carrying amount of the Liability
Answer:
Current price of share=40.1
Explanation:
The current value of a share is the present value of future dividends in perpetuity, discounted at the cost of equity (i.e. the return required by the providers of equity capital).
Based on the above discussion the share price shall be calculated as:
Present value of year 1 dividend=11(1+12%)^-1=9.82
Present value of year 2 dividend=8(1+12%)^-2=6.38
Present value of year 1 dividend=5(1+12%)^-3=3.56
Present value of year 1 dividend=2(1+12%)^-4=1.27
Present value of dividend after year 4=(d(1+g)/ke-g)(1+ke)^-4=(2(1+5%)/12%-5%)(1+12%)^-4=19.07
(Assuming that dividend growth rate is 5% after year 4)
Current price of share=40.1
(9.82+6.38+3.56+1.27+19.07)
Answer:
d
Explanation:
Systemic risk are risk that are inherent in the economy. They cannot be diversified away. They are also known as market risk. examples of this risk include recession, inflation, and high interest rates. Investors should seek compensation for systemic risk. Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
GM has a higher beta and thus it has a higher systemic risk
total risk is measured by volatility. The higher the volatility, the higher the total risk . GM has a higher volatility