Answer: c. If their maturities and other characteristics were the same, a 5% coupon bond would have more price risk than a 10% coupon bond.
Explanation:
Price risk of a bond is the risk that the bond changes price or rather the degree of price volatility. Bond prices change in reaction to market interest rates with higher rates meaning lower prices and lower rates meaning higher prices.
When the market interest rates rise above the Coupon on a bond, the bond price will fall below par and when the interest rates are below the coupon, the bond will be above par.
A 5% coupon bond will be more prone to changes in prices because market interest rates are generally low and fluctuate below 10% which means that they will affect the 5% bond more than the 10% because there are better chances of rates rising above or falling below 5% than there are of 10%.
Answer:
a. Cash basis - Service revenue is $900
b. Accrual basis - Service revenue is $2,100 (which is $1200 + $900)
Explanation:
In accounting, there are 2 basis for recognizing transactions; these are cash basis and accrual basis.
In cash basis, sales and expenses are not recorded unless cash has been collected and paid respectively. In the accrual basis of accounting, expenses and sales are recorded when incurred and earned respectively.
Revenue earned under the accrual basis would therefore include the revenue for which cash has been collected and those for which cash is yet to be collected.
Goodwell will recognize 3 months (Oct 1 - Dec 31) of rent revenue earned, and will reduce (debit) the unearned rent revenue for those 3 months.
2,500 x 3 months = 7,500
Journal Entry, Dec 31:
Unearned Rent Revenue: 7,500
Rent Revenue: 7,500
The new Unearned Rent Revenue Account balance will be:
12,500 - 7,500 = 5,000
A. True is the answer
Hope I helped
Answer: $9,000
Explanation:
Rule 144 is a regulation that governs the trading of restricted, unregistered, and control securities and is enforceable by the SEC.
Under the rule, the person, as an officer of the ABC Corporation is limited to selling the higher of 1% of the Outstanding stock the company has or the average weekly trading volume over the preceding 4 weeks.
1% of the outstanding 900,000 shares is;
= 1% * 900,000
= 9,000 shares
This is higher than the average weekly trading volume over the preceding 4 weeks so this is the maximum permitted sales figure.
