What condition exists if you have a monthy soending deficit?

Logan Corporation issued $800,000 of 8% bonds on October 1, 2006, due on October 1, 2011. The interest is to be paid twice a yea

Aleks04 [339]

Answer:

a)

period interest interest discount amortized bond's

payment expense on BP discount carrying value

0 49,320.60 750,679.40

1 32,000 37,533.97 43,786.63 5,533.97 756,213.37

2 32,000 37,810.67 37,975.96 5,810.67 762,024.04

3 32,000 38,101.20 31,874.76 6,101.20 768,125.24

4 32,000 38,406.26 43,786.63 6,406.26 774,531.50

b)

December 31, 2017, accrued interest on bonds payable

Dr Interest expense 19,050.60

Cr Interest payable 16,000

Cr Discount on bonds payable 3,050.60

c)

total interest expense year 2007:

($37,533.97/2) + $37,810.67 + ($38,101.20/2) = $18,776.99 + $37,810.67 + $19,050.60 = $75,638.26

Explanation:

the market price of the bonds:

$800,000 / 1.05¹⁰ = $491,130.60

$32,000 x 8.1109 (PV annuity factor, 4%, 10 periods) = $259,548.80

market price = $750,679.40

discount on bonds payable $49,320.60

discount amortization first payment = (750,679.40 x 0.05) - 32,000 = 5,533.97

discount amortization second payment = (756,213.37 x 0.05) - 32,000 = 5,810.67

discount amortization third payment = (762,024.04 x 0.05) - 32,000 = 6,101.20

discount amortization fourth payment = (768,125.24 x 0.05) - 32,000 = 6,406.26

3 0

2 years ago

Which of the following errors would cause the adjusted trial balance to be unequal? a. The adjustment for prepaid insurance was

zalisa [80]

Answer: Option (C) is correct.

Explanation:

There is a adjustment entry for depreciation of $3,545 but the amount that is debited as depreciation expense is different from the amount that is credited as accumulated depreciation.

Depreciation Expense A/C Dr. $3,454

To Accumulated Depreciation $3,545

This will lead to an unequal adjusted trial balance.

Option 'A' and 'B' has no effect on the adjusted trail balance to be unequal because whole transaction is omitted.

Option 'D' also has no effect on adjusted trail balance because the debit and credit amount will still match.

3 0

2 years ago

When you want to add coverage for something not included in an insurance policy, what would you add to your policy?

Leya [2.2K]

Riders are add-on options (Benefits) that can be added to a basic Insurance Policy

5 0

2 years ago

Read 2 more answers

Stock in Daenerys Industries has a beta of 1.2. The market risk premium is 6 percent, and T-bills are currently yielding 4.9 per

kobusy [5.1K]

Answer:

The best estimate of the company’s cost of equity is 12%

Explanation:

Estimate of the company’s cost of equity = (Required Return as per Capital Asset Pricing Model + Cost of Equity) / 2

Required Return as per Capital Asset Pricing Model = Risk Free rate + Market Risk Premium * Beta

= 4.9 % + ( 6% * 1.2)

= 0.049 + 0.06 * 1.2

= 0.049 + 0.072

= 0.1210

= 12.10%

Cost of Equity = (Expected Dividend/Price) + Growth Rate

= [( $ 1.30 * 1.08) / $ 36] + 8%

= 0.039 + 0.08

= 0.1190

= 11.90%

The best estimate of the company’s cost of equity = (12.10 % + 11.90 % )/ 2

= 24% / 2

= 12%

Hence, the best estimate of the company’s cost of equity is 12%

6 0

2 years ago

applied vs. actual manufacturing overhead davis manufacturing corporation applies manufacturing overhead on the basis of 150% of

Mashcka [7]

Answer:

Subapplication of 22,500

journal entry:

WIP 4,500 debit

finished goods 2,250 debit

COGS 15,750 debit

factory overhead 22,500 credit

Explanation:

Direct Labor cost during the year:

60,000 + 30,000 + 210,000 = 300,000 direct labor

Applied overhead:

cost driver x predetermined rate

300,000 x 150% = 450,000

Actual overhead: 472,500

Subapplication of 22,500

as this is a significant amount we must adjust the WIP inventory, cost of goods sold and fnished goods inventory

to know the adjustment on each account we calcualte each account percentage:

300,000 --> 22,500

60,000 --> 60,000/300,000 x 22,500 = 4,500 endingWIP

30,000 --> 30,000/300,000 x 22,500 = 2,250 finished goods

210,000--> 210,000/300,000 x 22,500 = 15,750 COGS

we do the adjuting entry to increase overhead and transfer into each concept

8 0

2 years ago