Answer:
C. Interest Expense for $32,500
interest expense 32,500 debit
premium on BP 2,500 debit
cash 35,000 credit
--to record interest payment--
Explanation:
proceeds: 1,050,000
face value: 1,000,000
premium on BP 50,000
straight line method is used therefore, we amortize the premium equally between payment:
the bond is outstanding for 10 years at 2 payment per year: 20 payment
50,000 / 20 = 2,500
now the cash outlay in favor to the bondholders:
1,000,000 x 7% / 2 = 35,000
The amortization decreasethe interest expense giving a value of 32,500
making option C correct.
Answer:
A recession occurs when an economy experiences a period in which there is - B. a decrease in total production.
According to economists, a recession is a two-consecutive quarterly periods of economic decline, as represented by GDP. In other words, if GDP falls for six consecutive months, we have a recession. And GDP is a measure of the total production of a particular region in a given period of time.
The business cycle exists because - D. total production experiences periods of increases and periods of decreases.
The business cycles refers to the cyclical nature of the periods of growth, and degrowth of total production of GDP. This means that it is natural and expected for total production to grow in some periods of time, and to fall in other periods of time, which affects firms and individuals accordingly: when GDP grows, firms produce more, hire more people, and incomes rise, when GDP falls, firms produce less, lay off people, and incomes stagnate, or go down.
Answer: B) The price for admission to a national park can be increased during peak times to limit overuse of the park.
Explanation:
In line with the rules of Supply and Demand, if a resource is in high demand, there should be a higher price associated with it to reflect its relative scarcity in relation to demand. If a resource is being overutilized (in demand) therefore, it would make sense that it gets a higher price.
This is the case with the national park during peak times. At this time there are quite a lot of people in it and this means that it is being overused. In such times, the entrance fee should increase to reflect that the demand is quite high and to limit the overuse of the park.
Answer:
- The lessee reports a single amount of lease expense, which is equal to interest expense plus amortization expense, in its income statement.
- The lessee reports lease expense on a straight-line basis and the lessor reports lease revenue on a straight-line basis over the lease term.
Explanation:
An operating lease is basically renting an asset from a lessor where the lessee will pay a certain amount every period for the use of the asset.
This rent payment is equal to the interest expense plus amortization expense and will be reported in the income statement of the lessee as an expense.
This amount will also be reported on a straight-line basis for the duration of the lease term which means that even if rent increases, it will still have to be reported by the same amount over the lease period because the lease increase should have been taken into account already.
The lessor also reports lease revenue on a straight-line basis over the lease term.
Answer: Consumer generated marketing.
Explanation:
The role of consumers to the growth and development of indutries and brands is vital. Consumer generated marketing is when producers make use of feedback such as reviews and user created content.
This is done to help the producers know what the people feel about the product and whether there are things to improve upon or things that the consumers will like to be added to the product.