Answer:
Total fixed cost = $1035
Rugs sells = 18
Total costs = $1179
Revenue = $558
Total variable cost = Total costs - Total fixed cost
= $1179 - $1035
= $144 for 18 rugs
= $8 per rug
Where,
x represents number of rugs
C(x) = $1035 + 8x ⇒ Cost function
Revenue for 18 rugs = $558
= $31 per rug
R(x) = 31x ⇒ Revenue Function
Profit = revenue - cost
P(x) = 31x - (1035 + 8x)
= 31x - 1035 - 8x
= 23x - 1035 ⇒ Profit Function
Answer:
c. Interest Expenses $ 3,744 Discount on Bonds Payable 344 Cash 3,400
Explanation:
Date General Journal Debit Credit
Interest Expenses $3,744
($62,401*12%*6/12)
Discount on Bonds Payable $344
Cash $3,400
($85,000*8%*6/12)
So, the correct journal entry to record the first interest payment is <em>Interest Expenses $3,744, Discount on Bonds Payable $344, Cash $3,400</em>
Answer:
$862
Explanation:
We assume the face value of the bond to be $1000
Coupon rate is 5% paid annually
Coupon payment = 5% x $1,000 = $50
Current market rate or Yield to Maturity (YTM) = 8.50%
We need to calculate the current market price of this bond.
Current price = 
+ [ Coupon payment x 
]
Where,
Face Value = $1000
Coupon Payment = $50
N = 5
r = 0.085 or 8.50 %
After plugging in the values in the above equation We get the current price as $862
$862 is the maximum amount Jason should be willing to pay for this bond
Answer:
Explanation:
Given that :
A business issued a 180-day, 8% note for $52,000 to a creditor on account.
Illustrate the effects on the accounts and financial statements of recording
(a) the issuance of the note and;
(b) the payment of the note at maturity, including interest.
(a)
We need to prepare the Note Payable and Balance sheet Entries in order to illustrate the effects on the accounts and financial statements of recording the issuance of the note:
SO;
NOTE PAYABLE
Account Payable 52000
Note Payable 52000
BALANCE SHEET
Access = Liabilities + Stockholders Income
' Equity Statement
No effect Account Payable -52000 No effect No effect
Notes Payable + 52000
NET EFFECT = 0
(b)
Illustrate the effects on the accounts and financial statements of recording of the payment of the note at maturity, including interest.
NOTES PAYABLE
Account Payable 52000
Interest expense 2080
(52000×8%× 180/360)
Cash 54080
BALANCE SHEET
Access = Liabilities + Stockholders Income
' Equity Statement
Cash = 54080 Notes Payable Retained Earnings Interest expense
=52000 = 2080 =2080
