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timama [110]
2 years ago
14

On March 1, 2021, McHugh Enterprises issued 1000 of its 8%, $1,000 bonds dated January 1, 2021 at 98. Interest is payable semian

nually on January 1 and July 1. The bonds mature on January 1, 2031. McHugh paid $50,000 in bond issue costs. McHugh uses straight-line amortization. The interest expense recognized on July 1, 2021 will be:__________
Business
1 answer:
natka813 [3]2 years ago
6 0

Answer: $82000

Explanation:

Interest will be calculated as:

= No of shares x Face value per Share x Interest rate

= 1000 × $1000 × 8%

= 1000 × $1000 × 0.08

= $80000

Total face value of shares issued = 1000 × $1000 = $1,000,000

Issue Amount will be:

= No of shares x Face value per Share x Issue rate

= 1,000 x 1,000 x 98 %

= $980,000

Discount on issue will be:

= $1,000,000 - $980,000

= $20,000

Amortization of Discount on issue per annum will be:

= $20,000/10

= $2000

Therefore, interest expense will be:

= $80000 + $2000

= $82000

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The correct answer is letter "B": perform an activity at a lower opportunity cost.

Explanation:

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3 years ago
All of the following are tests for determining qualifying child status except the ______.A. gross income testB. age testC. suppo
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a. gross income test

Explanation:

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DAR Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under P
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Answer:

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a.

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Share price of company is $28.20.

b.

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So value of unlevered firm is $4.512 million.

6 0
3 years ago
Your automobile insurance includes premiums of $510 for liability, $220 for collision, and $130 for comprehensive. what is your
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The operations vice president is adjusting the production quantities for the upcoming month of March for the coal company. Last
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Answer:

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3 years ago
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