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The shadow banking system refers to Group of answer choices nonbank financial institutions such as investment banks and hedge fu

madam [21]

Answer: nonbank financial institutions such as investment banks and hedge funds

5 0

4 years ago

Read 2 more answers

Universal Foods issued 10% bonds, dated January 1, with a face amount of $260 million on January 1, 2018. The bonds mature on De

kondaur [170]

Answer:

The bonds were issued at $220,879,628.13

This is lower than the face value to compensate for the lower coupon payment.

cash 220,879,628.13 debit

discount on BP 39,120,371.87 debit

bonds payable 260,000,000 credit

--to record the issuance of the bonds--

Interest expense 13,252,777.69 debit

Discoun on BP 252,777.69 credit

cash 13,000,000 credit

--to record the first interest payment--

Interest expense 13,267,944.35 debit

Discount on BP 267,944.35 credit

Cash 13,000,000 credit

--to record second interest payment--

Interest expense 13,539,156.67 debit

Discount on BP 539,156.67 credit

cash 13,000,000.00 credit

--to record Dec 31st, 2025 payment--

Explanation:

To determinate the price we will solve for the present value of the coupon payment and maturity at the market rate of %12

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

Coupon payment:

260,000,000 x 10% x 1/2 =13,000,000.000

time 20 years x 2 payment per year 40

yield to maturity 12% / 2 = 6%

$13000000 \times \frac{1-(1+0.06)^{-40} }{0.06} = PV\\$

PV $195,601,859.3298

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 260,000,000.00

time 40.00

rate 0.06

$\frac{260000000}{(1 + 0.06)^{40} } = PV$

PV 25,277,768.80

PV c $195,601,859.3298

PV m $25,277,768.8042

Total $220,879,628.1340

For the journal entries, we will multiply this current market price of the bonds by the market rate (YTM) the difference between this and the actual cash obligation generate by the bond is the amortization of the discount.

first interest payment

$220,879,628.13 x 6% = 13,252,777.69

less actual cash outlay: 13,000,000

amortization 252,777.69

second interest payment

($220,879,628.13- $252,777.69) x 6% = 13,267,944.35

less actual cash outlay: 13,000,000.00

amortization 267,944.35

December 31st, 2025:

This will be payment 14th

after building the schedule until that date we got:

8 0

3 years ago

Inflation is defined as a rise in the general level of prices. When inflation occurs, the buying power of the dollar would:

Anuta_ua [19.1K]

Answer: the buying power of the dollar would: decrease.

Explanation:

Purchasing power means the amount of goods that can be bought with the given unit of money. The value of the dollar decreases when there is an inflation. Inflation reduces money value by raising the prices of the goods and services in the country.

Purchasing power can be compared with the salaries received 50 years ago and current salaries. Though the current salaries have increased the prices of the goods have also increased accordingly. Which can also be termed as increased cost of living.

5 0

3 years ago

Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans

igomit [66]

Answer:

THORNTON INDUSTRIES

AMOUNT OF INTEREST TO BE CAPITALIZED FOR THE YEAR ENDED DECEMBER 31, 2016 AND 2017

2016

July 1 - Dec 31 $400,000 *4.8%*6/12 = $9,600

Sep 30 - Dec 31 $600,000*4.8%*3/12 = $7,200

Nov 30 - Dec 31 $600,000*4.8%*1/12 = $2,400

Total Interest for 2016  $19,200

2017

Jan 1 - Dec 31 $1,600,000*4.8% = $76,800

Jan 30 - Dec 31 $540,000*4.8%*11/12 = 23,760

Total interest for the year 2017 $100,560

weightred average cost of capital =

$2,000,000*8% + $8,000,000*4%

$2,000,000 + $8,000,000

= 160,000 + 320,000

10,000,0000

=$480,000 / 10,000,000 = 0.048 = 4.8%

Explanation:

Interest to be capitalized on construction expenditure will be interest on the amount borrowed to finance such construction. the interest will be from commencement of the construction to the cessation period

6 0

3 years ago

Joe received a DUI violation while partying last Christmas and he was found guilty by the court. His real estate license is due

Kazeer [188]

Answer:

Yes, Joe needs to disclose to the commission about his violation.

Explanation:

Driving under the influence (DUI) is the crime or offense of driving or operating a motor vehicle while impaired by alcohol or other drugs to a level that renders the driver incapable of operating a motor vehicle safely.

if the defendant violated probation by breaking a law, the probation revocation hearing will probably take place after the new offense has been disposed of.

Defendants are entitled to written notification of the time, place, and reason for the probation revocation hearing.

For Joe to be able to renew his real estate license he has to speak for a qualified attorney who will plead his case on his behalf.

5 0

4 years ago