Answer:
Assets: increase by 19,500,000
Liablities: increase by 19,500,000
Equity: no effect
Explanation:
cash proceeds: 19,500,000
face value: 20,000,000
discount 500,000
As the bonds issued were sold below par there is a discount.
the entry will be:
cash 19,500,000
discount on BP 500,000
bonds payable 20,000,000
This will generate an increase on assets for 19,500,000
and increase liablities for 19,500,000
The issuance of bonds do not generate revenues or expenses. So the equity remains unchanged-
Answer:
Consider the following explanation
Explanation:
Under Effective interest method, Interest calculated at the effective interest rate (i.e., the yield of the bond) is charged as an expense annually, and the payment made basis the Coupon rate.
In the given case, interest to be paid semi annually i.e, on June 30 and on December 31, will be $62,500 (i.e., 2,500,000 * 5% * 6/12).
On the basis of above, the interest expense to be charged in the 2017 can be calculated as follows: take a look to the attached archive.
As calculated above, the amount to be charged as interest expense for the year 2017 is (80,220 + 80,840 i.e.,) $ 161,060.
Answer:
<u>Lateral moraine</u>
Explanation:
It is important to note the duration of years here; 150 years ago. The Lateral moraine is a very familiar image when dealing with glaciers.
Therefore, the Lateral moraine would be most useful for tracing valuable gold deposits back to their bedrock source area since it is also an unconsolidated debris that is found on the side of glaciers.
Answer:
A) The GAAP statement is based on cost function rather than cost behavior.
Explanation:
Income statements that follow GAAP rules categorizes expenses based on their business function: product, selling or administrative.
While cost behavior categorizes costs based on how they influence a company's activities: variable, fixed and mixed. When a manager wants to measure the impact of any decision he/she makes, they need to use this type of categorization. For example, if fixed costs increase, what is the new break even point? If variable costs decrease, how is the marginal cost affected?
