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3 years ago

For each transaction indicate whether each account would be classified in the balance sheet as an asset

Business

1 answer:

oksano4ka [1.4K]3 years ago

6 0

Answer:

I'm not at this level

Explanation:

Note: I'm really sorry if I didn't answer this. I am just doing a challenge and earning points. Sorry

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Farmland Corporation issued $400,000 of 10-year bonds at a discount. Prior to maturity, when the carrying value of the bonds was

Stells [14]

Answer:

Please see journal entries below

Explanation:

The entries below are made in the books of Farmland Corporation, the issuer of the bond.

Upon redemption, journal entries would be as follows.

Debit: Bond Account $396,000 (cash paid to bond investors)

Credit: Cash/Bank Account $396,000 (cash paid to bond investors)

Debit: Profit/Loss Account $8,000 (premium paid over carrying value of bond, calculated below: )

Credit: Bond Account $8,000 (premium paid over carrying value)

Premium over carrying value is calculated as follows:

Redemption value - carrying value

= $(\frac{redemption price}{carrying price} *face value) - carrying value$

= $(\frac{99}{100} *$400,000) - $388,000$

= $396,000 - $388,000

= $8,000

3 0

4 years ago

A 1000 par value 5-year bond with an annual coupon rate of 8.0% compounded semiannually was bought to yield 7.5% convertible sem

Rus_ich [418]

Answer:

(b) 2.08

Explanation:

Using caclulator and inputs as present:

n = 10

I/Y = 7.5/2

=3.75

pmt = 40

FV = 1000

CPT PV = $1020.53

Now we shall create an amortization schedule:

Period pmt Interest End balance Difference(Premium amortized)

1 $40.00 $38.27 $1,018.80 $1.73

2 $40.00 $38.21 $1,017.01 $1.79

3 $40.00 $38.14 $1,015.14 $1.86

4 $40.00 $38.07 $1,013.21 $1.93

5 $40.00 $38.00 $1,011.21 $2.00

6 $40.00 $37.92 $1,009.13 $2.08

Therefore, The amount of premium amortized in the 6th coupon payment is $2.08

7 0

4 years ago

On April 1, 2021, Parks Co. purchased machinery at a cost of $42,000. The machinery is expected to last 10 years and to have a r

german

Answer:

Depreciation for 2021 is $6,300 with book value of the machinery being $35,700.
For 2022, Depreciation is $7,140 with book value of $28,560.

Explanation:

The double-declining method is otherwise known as the reducing balance method and is given by the formula below:

Double declining method = 2 X SLDP X BV

SLDP = straight-line depreciation percentage

BV = Book value

SLDP is 100%/10 years = 10%, then 10% multiplied by 2 to give 20%

At Year 2021, 20% X $42,000 = $8,400/yearly

Remember, the machinery was purchased on April 1, 2021, so 9 months depreciation would be accounted for as: 9/12 x $8,400 = $6,300.

So, the book value of the machinery is $42,000 - $6,300 = $35,700 at December 31, 2021

At Year 2022, 20% X $35,700 ($42,000 - $6,300) = $7,140

So, the book value of the machinery is $35,700 - $7,140 = $28,560 at December 31, 2022

Accumulated depreciation expense for Years 2021 to 2022, under this method, is $13,440 (addition of all the yearly depreciation).

8 0

3 years ago

Countess Corp. is expected to pay an annual dividend of $5.29 on its common stock in one year. The current stock price is $79.83

Nostrana [21]

Answer:

10.03%

Explanation:

Using the dividend discount formula, find the cost of equity; r

$r = \frac{D1}{P0} +g$

whereby,

D1 = Next year's dividend = 5.29

P0 = Current price of the stock = 79.83

g = growth rate of dividends = 3.40% or 0.034 as a decimal

Next, plug in the numbers to the formula above;

$r = \frac{5.29}{79.83} +0.034\\ \\ r =0.06627 + 0.034\\ \\ =0.10027$

As a percentage, r = 10.03%

Therefore, the company's cost of equity is 10.03%

7 0

3 years ago

a. Using the starting point formula, what is the price elasticity of demand for going from a price of $160 per unit to a price o

ki77a [65]

Answer:

Price Elasticity of Demand is -4

Explanation:

We can see the graph and easily calculate the Q1 which is 120 units at P1 $140 and Q2 which is 80 units at P2 $160 price.

The starting point formula for calculating price elasticity of demand is given as under:

Price Elasticity of Demand = (ΔQ / Q2) / (ΔP / P2)

Here

ΔQ = Q1 - Q2 = 120 - 80 = 40 units

ΔP = P1 - P2 = 140 - 160 = - $20

By putting value in the above equation, we have:

Price Elasticity of Demand = (40 Units / 80 Units) / (-$20 / $160)

Price Elasticity of Demand = -4

8 0

3 years ago