Sheridan company has $2800000 of bonds outstanding. The unamortized premium is $40300. If the company redeemed the bonds at 101, then there would be a gain redemption of $12300
To calculate the gain or loss redemption follow the following steps first add bonds outstanding and unamortized premium then subtract the amount with cash to find the cash, multiply the bond outstanding by 1.01 then subtract both the numbers the difference between the numbers will be a gain or loss redemption if the amount on debit side is greater than the amount on credit side before subtracting the numbers then it is gain redemption and vice versa.
According to the question(($2800000 + 40300) - (2800000 * 1.01)) = 12300 the journal entry of the following will be:
Bonds payable (Debit) $2800000
Unamortized premium (Debit) $40300
Gain on redemption (Credit) $12300
Cash (2800000*1.01) (Credit) $2828000
Therefore the gain redemption is $12300
If you are taking the redemption proceeds and subtracting what you, in the beginning, paid for the bond, then the difference will inform you of the answer. If it's positive, you then have a gain. If it is negative, you've got lost cash at the bond.
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If the market price is above or equal to the average variable cost, but below the average total cost the firm should keep producing in the run even though it does so at a loss.
<h3>When should a firm shut down production?</h3>
A firm should continue production in the short run if the price is above the average variable cost even if price is below the average total cost. The short run is a period when at least one or more factors of production are fixed.
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Answer:
The correct answer to the following question is $437,500.
Explanation:
In their books Higgins Repair service should record the value of the land as $437,500, no matter offer the made and they offer receive for selling the land. They made a deal with seller on April 15 , to buy the land for $437,500 and as per the cost concept or principle in accounting , an asset should be recorded in the books of account at the amount paid for acquiring it and this amount would not change in situations of inflation or change in market value.
Answer: A. The return on plan assets is higher than expected
Explanation:
Pension gains related to plan assets is said to occur when the return on plan assets is higher than expected. In a situation whereby an individual or a firm expect a certain return on an asset and when the asset's return was eventually more than the expected return on it, this means that there is a pension gains related to plan assets.
Answer:
The company's predetermined overhead rate for 2019 is $23,60
Explanation:
According to the given data we have the following:
Budgeted overhead = $2,100,000
Budgeted direct labor hours = 89,000
Overhead is applied based on direct labor hour.
Hence in order to calculate the company's predetermined overhead rate for 2019 we would have to make the following calculation:
overhead rate per direct labor hour = $2,100,000 / 89,000
overhead rate per direct labor hour =$23.60
The company's predetermined overhead rate for 2019 is $23,60