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mash [69]
2 years ago
9

On January 1, 2019, Tonika Company issued a four-year, $10,700, 7% bond. The interest is payable annually each December 31. The

issue price was $10,018 based on an 8% effective interest rate. Tonika uses the effective-interest amortization method. Rounding calculations to the nearest whole dollar, which of the following journal entries correctly records the 2019 interest expense?
A. Interest expense 1,052
Bond discount 205
Cash 847
B. Interest expense 847
Cash 847
C. Interest expense 805
Bond discount 42
Cash 847
Business
1 answer:
Marianna [84]2 years ago
7 0

Answer:

C. Interest Expense 805

Bond discount 42

Cash 847

Explanation:

The interest expense is calculated based on effective interest rate. The issue price is 10,018 which is the actual price and with effective interest rate interest amount is determined. The interest expense has cash value and bond discount.

10,018 * 8% = 804.45 approximately 805.

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8 0
2 years ago
Ou have been hired as the new pricing manager for WCG, which sells cell phone plans to customers. You manage a team of pricing a
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Answer:

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8 0
2 years ago
Assume you are to receive a 30-year annuity with annual payments of $2,000. The first payment will be received at the end of Yea
max2010maxim [7]

Answer:

Total FV= $678.615.02

Explanation:

<u>First, we need to calculate the value of the annuity at the end of the last payment:</u>

FV= {A*[(1+i)^n-1]}/i

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FV= {2,000*[(1.06^30) - 1]} / 0.06

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6 0
2 years ago
Beau Corporation sells a unit of its product for​ $250 per​ unit, while its variable costs per unit are​ $75. Fixed cost are bud
wolverine [178]

Answer:

Number of units that must be sold to earn the target profit is 3000 units.

The contribution margin ratio is 0.70

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We will use the break even analysis modified for target profit to calculate the number of units needed to earn the desired

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Number of units required to earn target profit = (325000 + 200000) / 175

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