Giveaway question for juliemwinkler(for them only)

On January 1, Year 1, Willette Company sold $240,000 of 6% ten-year bonds. Interest is payable semiannually on June 30 and Decem

Anna11 [10]

Answer:

$10,191

Explanation:

Calculation for the amount of interest expense that Willette will report for the six months ended June 30, Year 1

First step is to calculate the Semiannual interest payment using this formula

Semiannual interest payment = Face amount × (Rate ÷ 2)

Let plug in the formula

Semiannual interest payment = $240,000 × (6% ÷ 2)

Semiannual interest payment= $7,200

Second step is to calculate the Allocation of discount using this formula

Allocation of discount = (Face value of bonds − Issue price) ÷ Number of interest payments

Let plug in the formula

Allocation of discount = ($240,000 - $180,181) ÷ (10 years × 2 payments per year)

Allocation of discount = $59,819 ÷ 20

Allocation of discount = $2,991

Now let calculate the Interest expense using this formula

Interest expense = Interest payment + Allocation of discount

Let plug in the formula

Interest expense = $7,200 + $2,991

Interest expense = $10,191

Therefore the amount of interest expense that Willette will report for the six months ended June 30, Year 1 will be $10,191

4 0

3 years ago

Interest rates on 3-year Treasury securities are currently 1.92%, while 10-year Treasury securities yield 5.62%. If the pure exp

FromTheMoon [43]

Answer: 7.24%

Explanation:

From the question, we are told that:

3 years treasury securities have an interest rate = 1.92%

10 years treasury security has an interest rate = 5.62%

Let the 7 year treasury security interest in 3 years be represented by z.

Based on the expectation theory

( 1+1.92%)^3 × (1 + z%)^7 = (1 + 5.62%)^10

(1+0.0192)^3 × (1 + z%)^7 = (1 + 0.0562)^10

(1.0192)^3 (1 + z%)^7 = (1.0562)^10

1.05871(1 + z%)^7 = 1.72767

Divide both side by 1.05871

(1 + z%)^7 = 1.72767/1.05871

(1 + z%)^7= 1.6319

1 + z% = 1.6319^1/7

1 + z% = 1.6319^0.1429

1 + z% = 1.0724

z% = 1.0724 - 1

z% = 0.0724

We then convert the decimal to percentage

z = 7.24%

The market believes that 7-year Treasury securities will be yielding 7.24% in 3 years .

3 0

3 years ago

Alpha Products maintains a capital structure of 40 percent debt and 60 percent common equity. To finance its capital budget for

ad-work [718]

Answer:

its weighted cost of capital for the coming year is 9.64%

Explanation:

WACC is the minimum return expected from a project. It shows the risk of the company.

<u>Calculation of WACC.</u>

Capital Source Weight Cost Total

Debt 40% 6.60% 2.64%

Common Equity 60% 11.67% 7.00%

Total 100% 9.64%

Cost of Debt = Market Interest Rate × ( 1 - tax rate)

= 11%×(1-0.40)

= 6.60%

Cost of Equity = (Next year`s dividend/Current Market Price of a share)+Expected growth rate

= ($1.40/$30)+0.07

= 11.67%

8 0

3 years ago

A reason to establish internal control is to A. Provide reasonable assurance that the objectives of the organization are achieve

sweet [91]

Answer: D. Safeguard the resources of the organization.

Explanation:

The functions of internal controls are

to minimize risks
to protect assets
to ensure accuracy of records
to promote operational efficiency
to encourage adherence to policies, rules, regulations, and laws.c

The reason to establish internal control is to assist safeguard an organization and its objectives.

Hence, the correct option is D.

7 0

3 years ago

g Twins Jane and Hal each inherited $150,000 exactly ten years ago. Jane invested the entire amount in a brokerage account to fu

zepelin [54]

Answer:

a) Jane currently has $150,000 x (1 + 8%)¹⁰ = $323,838.75 in her account

in 20 years, she will have $323,838.75 x (1 + 5%)²⁰ = $859,240.61

b) we can use the future value of an annuity formula to calculate Hal's annual contribution.

future value = annual contribution x annuity factor

annual contribution = future value / annuity factor

future value = $959,240.61
FV annuity factor, 5%, 20 periods = 33.066

annual contribution = $959,240.61 / 33.066 = $29,009.88

6 0

3 years ago