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tia_tia [17]
3 years ago
8

LBM, Inc. issues 25,000 shares of common stock for $20 per share. The stock has a par value of $1 per share. By what amount woul

d LBM credit capital in excess of par? Group of answer choices $500,000 $475,000 $25,000
Business
1 answer:
Arisa [49]3 years ago
5 0

Answer:

$475,000

Explanation:

Calculation for By what amount would LBM credit capital in excess of par

Dr Cash $500,000

(25,000 shares*$20 per share)

Cr Common Stock $25,000

(25,000 shares*$1 per share)

Cr Capital in excess of par $475,000

($500,000-$25,000)

Therefore based on the above Journal entry and calculation the amount that LBM would credit as capital in excess of par will be $475,000 ($500,000-$25,000).

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Answer:

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Using the effective-interest method of amortization, the amount of interest expense that should be reported for 2020 is:

= $449,096

Explanation:

a) Data and Calculations:

Face value of bonds issued = $4,000,000

Issue price of the bonds =         4,498,490

Premium on the bonds =            $498,490 ($4,498,490 - $4,000,000)

Coupon interest rate = 12%

Effective interest rate = 10%

Interest payments = June 30 and December 31

June 30:

Cash payment for bond interest = $240,000 ($4,000,000 * 6%)

Interest expense =                            224,925 ($4,498,490 * 5%)

Amortization of bond premium =      $15,075 ($240,000 - $224,925)

Bonds value = $4,483,415 ($4,498,490 - $15,075)

December 31:

Cash payment for bond interest = $240,000 ($4,000,000 * 6%)

Interest expense =                              224,171 ($4,483,415 * 5%)

Amortization of bond premium =      $15,829 ($240,000 - $224,171)

Bonds value = $4,467,586 ($4,483,415 - $15,829)

Interest expense for 2020 = $449,096 ($224,925 + $224,171)

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Answer and Explanation:

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I hope this helps.
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Answer:

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