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kap26 [50]
3 years ago
9

On January 1, 2021, for $18.9 million, Cenotaph Company purchased 10% bonds, dated January 1, 2021, with a face amount of $20.9

million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.
Business
2 answers:
Zigmanuir [339]3 years ago
8 0

I bet you make millions..

Dmitrij [34]3 years ago
6 0

Answer:

1. Dr Interest expense $1,134million

Cr Discount on bonds payable $89,000

Cr Cash $1,045million

2. December 31,2021

Dr Interest expense $1,141,200

Cr Discount on bonds payable 96,200

Cr Cash $1,045,000

Explanation:

1. Preparation of the journal entry to record interest on June 30, 2021, using the effective interest method.

June 30,2021

Dr Interest expense $1,134million

[$18.9 million x 12%.x 6/12]

Cr Discount on bonds payable $89,000

($1,134million-$1,045million)

Cash [$20.9 million x 10% x 6/12] $1,045million

[To record semi-annual interest payment]

2. Prepareion the journal entry to record interest on December 31, 2021, using the effective interest method.

Date Account title and Explanation Debit Credit

December 31,2021 Interest expense [($18.9 million + $120,000) x 12% x 6/12] $1,141,200

Discount on bonds payable 96,200

$1,141,200-$1,045,000

Cash [$20.9 million x 10% x 6/12] $1,045,000

[To record semi-annual interest payment]

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Artyom0805 [142]

Answer: The correct answer is "d. all of the above"

Explanation: In a perfectly-competitive industry a firm have no incentive to enter or exit the industry when:

- market price is equal to minimum long-run average cost.

- each firm earns a normal return.

This happens because in perfect competition companies reach a long-term equilibrium where extraordinary benefits are eliminated.

6 0
3 years ago
Thomas Consultants provided Bran Construction with assistance in implementing various cost-savings initiatives. Thomas’s contrac
expeople1 [14]

Answer:

1. $54,000

2. $50,000

3. $50,000

Explanation:

1. The computation of transaction price if the expected value is used is shown below:

= Flat fee + (Cost savings × given percentage)

= $50,000 + ($20,000 × 20%)

= $50,000 + $4,000

= $54,000

2. The computation of transaction price if the estimate of variable consideration is used. So, only a flat fee should be considered and the cost saving is ignored. Hence, the amount is $50,000

3. The computation of transaction price if the estimate of variable consideration is used. So, only a flat fee should be considered and the cost saving is ignored. Hence, the amount is $50,000 as there is very uncertainty due to lack of experience

6 0
3 years ago
The ________, published by the Department of Labor, lists more than 20,000 job titles and descriptions and serves as a useful to
matrenka [14]

Answer:

Dictionary of Occupational Titles

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6 0
3 years ago
The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of
Irina-Kira [14]

Answer:

Retail Division  $480,000

Commercial Division  $30,000

Explanation:

To measure divisional income consider only those items attributable to a particular division.

Retail Division

Sales                                                                             2,150,000

<em>Less</em> Cost of Sales                                                       (1,300,000)

Controllable Contribution                                              850,000

<em>Less</em> Controllable Fixed Cost :

Selling expenses                                                          (150,000)

Allocated Central Cost (2,750/4,000×$320,000)     (220,000)

Divisional Profit Contribution                                       480,000

Commercial Division

Sales                                                                              1,200,000

<em>Less</em> Cost of Sales                                                        (800,000)

Controllable Contribution                                              400,000

<em>Less</em> Controllable Fixed Cost :

Selling expenses                                                          (150,000)

Allocated Central Cost (1,250/4,000×$320,000)      (220,000)

Divisional Profit Contribution                                         30,000

8 0
3 years ago
On October 1, 2019, Priscilla purchased a business. Of the purchase price, $92,000 is allocated to a patent and $552,000 to good
Firdavs [7]

Answer:

$10,730

Explanation:

1. Patent: $92,000/15 years = $6,133

$6,133 × 3/12 = $1,533

2.Goodwill: $552,000/15 years= $36,800

$36,800 × 3/12 = $9,200

Total: $1,533 + $9,200= $10,733

Approximately $10,730

3 0
3 years ago
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