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3 years ago

Which of the following is true about bonds?

Business

1 answer:

nata0808 [166]3 years ago

8 0

Answer:

B. The primary advantage to municipal bonds is that interest income received is not taxed by the federal government.

Explanation:

A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.

A municipal bond can be defined as a type of bond that is typically issued by a municipality, county, local government or state in order to finance or sponsor capital expenditures for the public such as water supply, construction of roads, etc.

Hence, the primary advantage to municipal bonds is that interest income received on this type of bond is not taxed by the federal government.

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Robert wants to get serious about saving for a new car. Which account would you recommend? Why?

k0ka [10]

Answer:

1) Money Market Savings Account

2) Online Savings Account

Explanation:

1) Money market accounts which are also known as money market savings or deposit accounts, are accounts that may give interest on a tier bases and may also give waivers on due fees if a customer is able to maintain a particular balance per month

Money market accounts are accounts that is better adapted for a customer that is able to maintain a substantial balance in their bank accounts and would like to be offered a higher interest than that which is given by a basic savings account

2) For Janelle, given that her savings duration are for a period of t months and the amount save is $550, the savings account with a high combined interest rate and flexibility is the online savings account, and given that her current online savings account earns 0.75%, which is high compared to average interest rate of online savings account, her online savings account is still her best option.

8 0

3 years ago

XYZ Company purchased a new piece of equipment on January 1, 2022. The following information relates to the equipment purchased:

mina [271]

Answer:

Residual Value = $5,400

Explanation:

At first, we have to calculate the cost of equipment.

Using double-declining method,

The depreciation as per 2023 = $30,000.

The depreciation rate to use the double-declining method = (100%/Useful life) x 2 = (100%/8) x 2 = 25%

Therefore, the beginning balance of equipment in 2023 (or, the ending balance in 2022) = $\frac{30,000}{0.25}$

The beginning balance of equipment in 2023 = $120,000

Using the same approach,

The beginning balance of equipment in 2022 (Or, the purchasing price) =

Depreciation = Purchase price x 25%

since the purchase price and depreciation are unknown, therefore, we use,

Ending value in 2022 = Purchase price x (100% - 25%) (Depreciation rate is 100%)

or, $120,000 = Purchase price x 75%

or, Purchase price = $120,000/0.75 = $160,000

Now, using the straight-line method,

Useful life = 8 years

Purchase price = $160,000

Book value after 4 years (As of December 2025, the equipment was purchased in January 2022) = $82,700

Therefore, accumulated depreciation = $160,000 - 82,700 = $77,300 for 4 years.

As the straight-line method depreciation is same for each year,

the depreciation for the first year = $\frac{77,300}{4}$ = $19,325

According to the straight-line method,

Depreciation = $\frac{Purchase price - Residual value}{Useful life}$

or, $19,325 = $\frac{160,000 - Residual Value}{8}$

or, $19,325 x 8 = $160,000 - Residual value

or, Residual Value = $160,000 - $154,600

Hence, Residual value = $5,400

6 0

3 years ago

The Tennis Times (TTT) is a publisher of magazines. Its accounting policy for subscriptions follows:RevenuesRevenues from our ma

serg [7]

Answer:

The Tennis Times:

1) Accounts, amounts, and accounting equation effects of transactions:

a) Cash Account and Deferred Subscription Revenue Account will be debited and credited with the sum of $420 million respectively.

The accounting equation is Assets (Cash) will be increased and Liabilities (Deferred Subscription Revenue) increased by $420 million respectively.

b) Deferred Subscription Revenue Account and Subscription Revenue Account will be debited and credited with the sum of $204 million in 2018 respectively.

The accounting equation is Retained Earnings will increase and Liabilities (Deferred Subscription Revenue) will decrease by $204 million respectively.

c) Deferred Subscription Revenue Account and Subscription Revenue Account will be debited and credited with the sum of $216 million in 2019 respectively.

The accounting equation is Retained Earnings will increase and Liabilities (Deferred Subscription Revenue) will decrease by $216 million respectively.

2) Journal Entries:

2018:

a) Debit Cash with $420 million

Credit Deferred Subscription Revenue with $420 million

To record the collection of subscription for 2018 and 2019.

b) Debit Deferred Subscription Revenue Account with $204 million

Credit Subscription Revenue Account with $204 million

To recognize subscription for 2018

c) Debit Deferred Subscription Revenue Account with $216 million

Credit Subscription Revenue Account with $216 million

To recognize subscription for 2019

Explanation:

a) When revenue is collected, it should be recognized in the financial statement (Income Statement) based on the matching principle and accrual concepts.

The matching principle states that revenue for a period should match the expenses or costs incurred for earning the revenue. And the accrual concepts states that revenue and costs should be recognized whether cash was received or not.

The implication is that when though revenue was collected for 2018 and 2019, only the revenue for 2018 should be recognized in the financial statement of 2018. The other part for 2019 should be deferred till 2019 when it would be recognized.

4 0

2 years ago

For the current year ($ in millions), Funky Freightways had $92 in pretax accounting income. This included warranty expense of $

sergeinik [125]

D Step by step yessirr

7 0

3 years ago

A proposed new project has projected sales of $195,000, costs of $92,000, and depreciation of $25,200. The tax rate is 25 percen

rusak2 [61]

Answer:

EBIT + Depreciation - Tax

= (195000-92000-25200) + 25200 - 19450

= $83,550

Top down OCF = EBIT - (EBIT * Tax) + Depreciation

Top down OCF = (195000-92000-25200) - ((195000-92000-25200) * 0.25) +25200

Top down OCF = 77800 - 19450 + 25200

Top down OCF = $83,550

Tax shield OCF = (Sales - Exp) (1-tax) + (Dep * tax)

Tax shield OCF = (195000-92000) (1-0.25) + (25200 * 0.25)

Tax shield OCF = 77250 + 6300

Tax shield OCF = 83550

Bottom Up OCF = Net Income + Dep

Bottom Up OCF = (77800 * (1-0.25) + 25200

Bottom Up OCF = 83550

5 0

3 years ago