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zaharov [31]
2 years ago
15

A company issues $100,000 face value, zero-coupon, 4-year U.S. corporate bonds on January 1, 20XO, when the market rate for simi

lar risk bonds is 12%. The bond uses annual compounding. The firm uses effective-interest amortization. What is the amount for the second discount or premium Bond Payable journal entry
Business
1 answer:
aivan3 [116]2 years ago
6 0

Answer:

Amount = Maturity/(1+risk rate)⁴

Amount = $100,000/(1+0.12)⁴

Amount = $63,552 (Approx)

Interest payable = $63,552 x 0.12

Interest payable = $7,626 (Approx)

Interest payable (2nd period) = ($63,552+$7,626) x 0.12

Interest payable (2nd period) = $8,541 (Approx)

Explanation:

                           JOURNAL ENTRY

                                BOOKS OF (.....)

Date          Account title         Debit   Credit

       Cash a/c                   Dr    $63,552  

                  To Bonds payable a/c    $63,552

1st-period    

             Bond Interest a/c       Dr   $7,626

         To Bonds payable a/c                  $7,626

2nd-period  

             Bond Interest a/c       Dr   $8,541

         To Bonds payable a/c                  $8,541

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Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the
Anton [14]

Solution :

a).

Estimated overhead                                1,250,000

Divide by the estimated machine hours    50,000        

Predetermined overhead rate                      25

Actual machine hours                                  54,300

Multiply by predetermined overhead rate        25

The factory overhead amount applied        $ 1,357,500

b).

Actual factory overhead                              1,348,800

Less : factory overhead amount applied     1,357,500

The underapplied amount is                       $ 8700

4 0
3 years ago
Which Of the following is the most important academic skill that you would need in a scientific career?
Svetlanka [38]

Research skills

(Time management is lower on the totem pole while the other 2 are on the bottom)

8 0
3 years ago
Read 2 more answers
Pop Consulting leased machinery to Red Inc. on July 1, 2018. The lease was recorded as a sales type lease. The present value of
labwork [276]

Answer:

The increase in earnings is $136511.56

Explanation:

Since the lease is a sale type of lease,it means that as soon as the machinery is delivered to the lessee,profit should be recognized on the lease transaction,which is computed below:

Profit on lease=present value of lease payments-costs

                         =$274149-$156000

                          =$118149

However,every six months interest is charged on the lease,which clearly indicates another source of earnings,the interest in the first six months is given below:

Interest=($274149-$44617)*8%

             =$18362.56

Please note that interest is charged after lease payment as lease payment is made in advance not in arrears.

Conclusively, the increase in earnings is $118149+$18362.56

That is $136511.56

                                                                   

5 0
3 years ago
The financial statements of a company are the primary sources of information that enable us to communicate the financial results
maks197457 [2]

Answer: both internally and externally

                     

Explanation: In simple words, financial statements refers to the group of reports and statements that are prepared by an organisation for communication its financial performance and postilion to its internal and external stakeholders.

It constitutes balance sheet, cash flow statement and income statement etc.

4 0
3 years ago
Hat's accounting records showed the following:
levacccp [35]

Answer:

D. $55,000

Explanation:

Sales = 250,000

Gross Profit = 250,000 x 40% = 100,000

Cost of goods sold = 250,000 - 100,000 = 150,000

Cost of good sold = Opening Inventory + Purchases - Closing Inventory

150,000 = 35,000 + 200,000 - Closing Inventory

150,000 = 235,000 - Closing Inventory

Closing Inventory = 235,000 - 150,000

Closing Inventory = 85,000

Inventory damaged by flood = 85,000 - 30,000 = 55,000

6 0
3 years ago
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