The first step in the target market selection process is

Q 11.35: Felix Incorporated has just exchanged 1,250 shares of $65 par-value preferred stock for a parcel of land advertised for

Dvinal [7]

Answer:

Felix Incorporated

Exchange of Preferred Stock for Land:

Journal Entries:

Debit Land $90,000

Credit Preferred Stock $81,250

Credit Additional Paid-in Capital - Preferred Stock $8,750

To record the issue of 1,250 of $65 par-value preferred stock for land with a fair price of $90,000.

Explanation:

Felix Incorporated will debit Land with the fair price of $90,000 and Credit the Preferred Stock account with $81,250 (1,250 x $65) at par-value. The difference between the fair price of land and the preferred stock at par-value is credited to additional paid-in capital account for preferred stock. Felix Incorporated cannot take into account the current market value of the stock at $75 in its accounting records. The current share price of $75 is for the benefit of investors, and can only serve as basis for Felix Incorporated to decide transactions with potential investors.

4 0

3 years ago

A purchase of a new issue of stock takes place Group of answer choices in the primary market. in the secondary and primary marke

mash [69]

Answer:

in the primary market and usually with the assistance of an investment banker.

Explanation:

Primary markets are ones where newly issues securities are sold. When companies seek to gain capital from investors, they issue securities that can be bought buy investors in exchange for capital.

Investment bankers are usually involved in the sale of securities in the primary markets. They obtain the securities on behalf of the investors.

Primary markets are also called new issues market

7 0

3 years ago

On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for G

artcher [175]

Answer:

1. $3,000,000

2. Liability $1,996,041

Asset$2,500,000

Explanation:

1. Calculation to Determine the present value of the lease payments at June 30, 2021

Present value of lease payments will be calculated as : $562,907 × 5.32948

(Present value of an annuity due of $1:

n = 6, i = 5% is 5.32948)

Present value of lease payments = $3,000,000

Therefore the Present value of lease payments will be $3,000,000

2. Calculation to Determine the pretax amounts related to the lease that Georgia-Atlantic would report in its balance sheet at December 31, 2021

Liability at December 31, 2021

Initial balance, June 30, 2021 3,000,000

June 30, 2021 Reduction(562,907)

Dec. 31, 2021 reduction (441052)

[562,907-(3,000,000-562,907)*5%]

December 31, 2021 NET LIABILITY $1,996,041

ASSETS at December 31, 2021

Initial balance, June 30, 2021 3,000,000

Accumulated depreciation at Dec. 31, 2021 (500,000)

(3000000/3*1/2)

December 31, 2021 ASSETS $2,500,000

Therefore the pretax amounts related to the lease that Georgia-Atlantic would report in its balance sheet at December 31, 2021 will be : Liability $1,996,041

Asset$2,500,000

3 0

3 years ago

What does it mean if you have no annual contract on a cell phone?

4vir4ik [10]

It means that ur phone is really urs caused u don't have to pay it off any mpre

4 0

3 years ago

Which one of the following statements is true about a $1,000, 6% annual coupon bond that is selling for $1,012? The yield-to-mat

Leviafan [203]

Answer:

The correct statement is "the current yield is less than 6%".

Explanation:

A bond only sells at a premium if the yield to maturity is less than the coupon rate. So the first statement is false.

Current Yield = $\frac{Annual Coupon}{Current Bond Price} =\frac{60}{1,012}=0.059$ . The second statement is correct.

If the yield to maturity is equal to the coupon rate, the bond should be selling at par i.e the market price of the bond should be $1,000, therefore the 3rd statement if incorrect.

The current yield can only equal the coupon rate if the bond is selling at par. Therefore the last statement is incorrect.

3 0

3 years ago