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Karolina [17]
3 years ago
5

Mufala, Inc., will issue $10,000,000 of 6% 10-year bonds. The market rate for bonds with similar risk and maturity is 8%. Intere

st will be paid by Mufala semiannually. What is the issue price of the bonds
Business
1 answer:
zubka84 [21]3 years ago
4 0

Answer:

the issue price of the bond is $8,640,999

Explanation:

The computation of the issue price of the bond is shown below:

Particulars                       Amount       PV factor   Present value  

Semi-annual Interest     $300,000     13.59033  $4,077,099  

Principal                         $10,000,000  0.45639  $4,563,900  

Issue price of the bonds                                        $8,640,999

Therefore the issue price of the bond is $8,640,999

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Why is it relevant that finance tends to attract large amounts of money?
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Explanation:

An organization to be successful in the long term and competitive in the market, needs financial capital to carry out its activities, for this they open the company's capital to investors, who are the capital holders willing to inject capital into the company and receive dividends business, thus becoming a partner of that company.

It is essential that companies attract investors willing to inject a large amount into the business, as this benefits both, since a company with larger amounts of assets will produce more, have its obligations up to date and remain better positioned in the market.

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2 years ago
Following are account balances (in millions of dollars) from a recent FedEx annual report, followed by several typical transacti
Harman [31]

Question Completion:

Prepare the necessary journal entries without the narration.

Answer:

FedEx

a. Debit Cash $17,600

Debit Accounts Receivable $21,704

Credit Service Revenue $39,304

b. Debit Equipment $3,434

Credit Note Payable (long-term) $3,434

c. Debit Rent Expense $10,136

Debit Prepaid Rent $3,728

Credit Cash Account $13,864

d. Debit Maintenance Expense $3,864

Credit Cash Account $3,864

e. Debit Cash Account $24,285

Credit Accounts Receivable $24,285

f. Debit Long-term Notes Payable $350

Credit Cash Account $350

g. Debit Cash Account $320

Credit Common Stock $2

Credit Additional paid-in capital $318

h. Debit Salaries and Wages Expense $15,276

Credit Cash Account $15,276

i.  Debit Spare parts, supplies, and fuel Expense $8,564

Credit Cash Account $8,564

j. Debit Accounts Payable $784

Credit Cash Account $784

k. No journal is required.

Explanation:

With the above journal entries, the accountants at FedEx have recorded the listed business transactions for the first time in the accounts of FedEx.  From the entries, these transactions will then be posted to the general ledger where accounts, transactions, and business events are summarized.

8 0
3 years ago
Blossom Co. records purchases at net amounts and uses periodic inventories. Prepare entries for the following: (Credit account t
xz_007 [3.2K]

Answer:

See the explanation below

Explanation:

Blossom Co. Journal Entries

Date            Details                            DR ($)               CR ($)

June 11        Purchases                      19,000

                   Accounts payable                                 19,000    

                  <em> Being the purchase of merchandise on account</em>

June 15       Account payable                750

                   Return outward                                         750        

                   <em>Being the return of a part of the merchandise purchased</em>

Note:

Blossom Co. returned the goods within 10 days, the full amount of the good returned will be charged to the accounts receivable.

Also, assuming that Blossom Co. within 10 days, it will enjoy 2% discount on the outstanding accounts payable and this will be calculated and recorded as follows:

Cash paid within 10 days = (19,000 - 750) × 98% = 17,885  

Date            Details                            DR ($)               CR ($)

                   Account payable            17,885  

                   Cash                                                          17,885        

                   <em>Being cash paid for the merchandise purchased</em>

However, if it pays after 10 days, the transactions will be as follows:

Cash paid after 10 days but on or before 30th day = 19,000 - 750 = 17,885  

Date            Details                            DR ($)               CR ($)

                   Account payable            18,250  

                   Cash                                                          18,250        

                   <em>Being cash paid for the merchandise purchased</em>

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