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Flauer [41]
3 years ago
11

On December 1, year 1, Lester Company issued at 103, four hundred of its 9%, $1,000 bonds. Attached to each bond was one detacha

ble stock warrant entitling the holder to purchase 10 shares of Lester's common stock. On December 1, year 1, the market value of the bonds, without the stock warrants, was 95, and the market value of each stock purchase warrant was $50. The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be:______
a. $387,280.
b. $391,400.
c. $400,000.
d. $412,000.
Business
1 answer:
Andrews [41]3 years ago
8 0

Answer:

Lester Company

The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be:______

c. $400,000.

Explanation:

Bonds issued at 103, 9% $1,000

Number of bonds issued = 400

Face value of bonds = $1,000 * 400 = $400,000

Proceeds from Bonds = $1,030 * 400 = $412,000

Premium from bonds issue = $12,000 ($412,000 - 400,000)

Carrying amount = $400,000

$400,000 is the bonds payable at maturity.  The $12,000 bonds premium will be amortized with the interest expense.  This implies that for the life of the bonds, part of the $12,000 will be deducted from the annual interest expense.

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Why is a bank more likely to offer you credit if you have a cosigner?
Brums [2.3K]

Answer:

Because a cosigner is another person who is also responsible for ensuring the loan is paid.

Explanation:  A cosigner is a person who is signing on to the loan and by doing so, they are jointly taking on responsibility for repayment of the loan. So basically loan repayment is being guaranteed by the person taking out the loan and the cosigner.

5 0
3 years ago
The risk premium of a security is determined by its ________ risk and does not depend on its
Neko [114]

Answer: (B) Systematic, Unsystematic

Explanation:

The systematic risk is one of the type of investment and it is measured by investment return covariance in the market. The systematic risk is basically divided by market risk once it is calculated.

The premium risk of the security is mainly determine by the systematic risk and it is not depend upon its unsystematic risk.

The unsystematic risks is basically inherited from the specific industry and the risk can be reduced by the diversification.

Therefore, Option (B) is correct.

5 0
3 years ago
On January​ 1, 2019, Commercial Equipment Sales issued $ 29 comma 000 in bonds for $ 21 comma 700. These are sixminusyear bonds
maxonik [38]

Answer:

$2,058.33

Explanation:

bond's face value = $29,000

bond's market value = $21,700

interest rate = 10%

n = 6 x 2 coupons = 12

discount on bonds payable = $29,000 - $21,700 = $7,300

discount amortized per coupon payment = $7,300 / 12 = $608.33

total interest expense = ($29,000 x 10% x 1/2) + $608.33 = $1,450 + $608.33 = $2,058.33

the journal entry to record the coupon payment in June 30,2019:

Dr Interest expense 2,058.33

    Cr Cash 1,450

    Cr Discount on bonds payable 608.33

8 0
3 years ago
Global Company makes a product that is expected to use 2.2 pounds of material per unit of product. The material has a standard c
avanturin [10]

Answer:

Favorable for price and unfavorable for usage.

Explanation:

Provided Information,

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Since Standard Price $2 is more than actual price = $1.95 the variance is favorable.

In material quantity variance we have = (Standard Quantity - Actual Quantity) \times Standard Rate

Since actual quantity used = 2.3 pounds is more than standard 2.2 pounds the variance will be unfavorable

Therefore, Price Variance = Favorable, and Quantity Variance = Unfavorable.

7 0
4 years ago
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kap26 [50]

Answer:

$14890 is the correct option because if any parent adopts a child in 2022  there is a federal adoption tax credit of up to $14,890 per child.

<h3>Claiming the Federal Adoption Tax Credit for 2022</h3>

A federal adoption tax credit of up to $14,890 per child is available for adoptions that are finalized in 2022. The adoption tax credit for 2022 is not transferable.

Parents who wish to receive the credit must:

have adopted a child who is not a stepchild - The child must be less than 18 or incapable of caring for themselves due to physical or mental impairment.

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To know more about 'Adoption tax credit', visit :brainly.com/question/15410304

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6 0
2 years ago
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