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3 years ago

2. Finding the Maturity You've just found a 10 percent coupon bond on the market that sells for par

Business

1 answer:

kirill [66]3 years ago

6 0

Answer and Explanation:

The computation of the maturity of the bond is as follows;

When the bond sales at par that means the future value is equivalent to the present value. Also the par value is considered as a future value and we assume the par value be $1,000. Also the coupon rate and the market rate is the same i.e. 10%

Now

Present value = $1,000

Future value = $1,000

PMT = 10% of $1,000 = $100

RATE = 10%

The formula is shown below:

= NPER(RATE;PMT;-PV;FV;TYPE)

The present value comes in negative

After applying the above formula, the maturity would be

As it shows #VALUE so it is not able to find therefore the maturity would be equal to the par value i.e. $1,000

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The office building Donna owned and used for her desk-top publishing business was destroyed by a hurricane. Although the basis o

Anna35 [415]

Answer:

Donna made a realized gain of 8,000 dollars

the basis for the building now will be of 152,000 dollars

Explanation:

realized gain:

insurance proceeds less replacement cost:

160,000 - 152,000 = 8,000

the basis (value of the new office building for tax purposes) will be the 152,000 which is the cost of the office building

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3 years ago

If a gain of $5,278 is realized in selling (for cash) office equipment having a book value of $50,852, find the total amount rep

Alina [70]

Answer:

B) $56,130

Explanation:

The cash flow statement shows how the company's operating, investing and financing activities affect the flow of cash by generation or use.

The investing activities section is where the purchase of fixed assets and the amount received for the disposal of these assets are accounted for.

Given that a gain was realized and the book value of the asset was given, the amount received for the disposal

= $5,278 + $50,852

= $56,130

This is the amount that will be reported in the investing activities section of the statement of cash flows as an inflow.

6 0

3 years ago

Consider a bond that costs $1,000 and pays an $80 interest payment each year.

Anna007 [38]

Answer:

The interest rate for this bond is 8% per annum.

Explanation:

Given that,

a bond that costs $1,000 and pays an $80 interest each year.

To find the rate of interest, we use the following formula is

I=Prt

Here P = principal= $1,000

I=interest= $80

t=time= 1 year

∴80 = 1000×r×1

$\Rightarrow r=\frac{80}{1000}$

⇒r = 0.080

⇒r= 8%

The yield for this bond is 8% per annum.

7 0

3 years ago

On October 14, the Patrick Company sold merchandise with an invoice price of $1,200 ($770 cost), with terms of 2/10, n/30, to th

Anna11 [10]

Answer:

Patrick Company

Journal Entries:

Oct. 14: Debit Accounts receivable (Baxter Company) $1,200

Credit Sales revenue $1,200

To record the sale of goods on account, terms of 2/10, n/30.

Oct. 14: Debit Cost of goods sold $770

Credit Inventory $770

To record the cost of goods sold.

Oct. 18: Debit Sales returns $220

Credit Accounts receivable (Baxter Company) $220

To record the return of goods (wrong size) by Baxter.

Oct. 18: Debit Inventory $170

Credit Cost of goods sold $170

To record the cost of goods returned.

Oct. 24: Debit Cash $960

Debit Cash discounts $20

Credit Accounts receivable (Baxter Company) $980

To record the receipt of check on full settlement, including discounts.

Explanation:

a) Data and Calculations:

Oct. 14: Accounts receivable (Baxter Company) $1,200 Sales revenue $1,200, terms of 2/10, n/30.

Oct. 14: Cost of goods sold $770 Inventory $770

Oct. 18: Sales returns $220 Accounts receivable (Baxter Company) $220

Oct. 18: Inventory $170 Cost of goods sold $170

Oct. 24: Cash $960 Cash discounts $20 Accounts receivable (Baxter Company) $980

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3 years ago

Over a four-year period, LaKeisha Thompson purchased shares in the Oakmark I Fund. Using the following information, answer the q

ArbitrLikvidat [17]

Answer:

LaKeisha Thompson

a. At the end of four years, the total amount invested is:

= $6,000

b. At the end of four years, the total number of shares purchased is:

= 166.81

c. At the end of four years, the average cost for each share is:

= $35.97.

Explanation:

a) Data and Calculations:

Investments in Oakmark I Fund:

Year Investment Price Number

Amount per share of share

Feb 2008 $1,500 $40 37.50

Feb 2009 1,500 30 50

Feb 2010 1,500 34 43.60

Feb 2011 1,500 42 35.71

Total $6,000 166.81

Average cost per share = $35.97 ($6,000/166.81)

7 0

3 years ago