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Aleks [24]
3 years ago
6

X2 issued callable bonds on January 1, 2015. The bonds pay interest annually on December 31 each year. X2's accountant has proje

cted the following amortization schedule from issuance until maturity:
Date Cash Paid Interest
Expense Decrease in Carrying Value Carrying Value
1/12015 $107,167
12/31/2015 $8,755 $8,038 $717 106,450
12/31/2016 8,755 7,984 771 105,678
12/31/2017 8,755 7,926 829 104,849
12/31/2018 8,755 7,864 891 103,958
12/31/2019 8,755 7,797 958 103,000
What is the annual market interest rate on the bonds?
Business
1 answer:
Leona [35]3 years ago
5 0

Answer:

market rate is 7.5%

Explanation:

We will work with the formulas for bonds amortization under effective rate method:

1.-  Face value x rate = cash proceeds

<em>2.- Carring Value x market rate = interest expense</em>

3.- Cash proceds - interest expense = amortization

With the second formula, and the givne value we are able to solve for market rate:

carrying value at 12/31/2015 is used to calcualte the 2016 interest expense:

106,450 x market rate= 7,984

market rate = 7,984/106,450 = 0.07500 = 7.5%

carrying value at 12/31/2016 is used to calcualte the 2017 interest expense:

105,678 x market rate = 7,926 = 0.07500 = 7.5%

So, we can conclude the market rate is 7.5%

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Answer:

Cost of Goods Sold for the month is $1656

Explanation:

Weighted Average Cost System calculates a new average for goods after each purchase.

Mountain Made Inventory Balance runs as follows:

<u>At Beginning:</u>

(3 quilts × $200) = $600

<u>After Purchased of 7 additional quilts for $210 each:</u>

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<u>At end</u>

2 quilts remained unsold. Therefore sold quilts were 8 ie (10quilts-2quilts)

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3 years ago
Discuss the Sarbanes-Oxley Act 2002 and how it helps curb accounting fraud.
Soloha48 [4]

The Sarbanes-Oxley Act of 2002 was used to curb accounting fraud by improving financial disclosure of corporations, and checking and fixing frauds if they were found.

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4 0
3 years ago
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Pay discrepancies i believe
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2 years ago
Which of these options for saving money typically offers the most liquidity?
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What does the investment component of GDP measure?
Allisa [31]

Answer:

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