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3 years ago

The market price of a bond issued at a premium is the present value of its principal amount at the market rate of interest:

Business

1 answer:

Goryan [66]3 years ago

5 0

Answer:

D. In addition to the present value of all future interest payments at the market (effective) interest rate

Explanation:

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Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following operating results whi

iVinArrow [24]

Answer:

The order should be accepted as it will icnrease contribution by 2,700 dollars

Sales revenue 112,500

variable cost (106,800)

additional fixed cost (3,000)

contribution 2,700

Explanation:

We have to calculate the variable cost to compare against the offer sales price:

COGS

2,600,000 x 70% = 1,820,000

Operating expense

840,000 x 80% = 672,000

total variable 2,492,000

variable per unit:

2,492,000 / 350,000 = 7.12

we now calculate the contribution of the order and subtract the additional cost:

15,000 units x (7.50 - 7.12) -3,000 additional shipping

contribution 2,700

6 0

4 years ago

A company is recording the disposal of accounts receivable with two different transactions. One transaction affects the balance

In-s [12.5K]

The following statements more accurately describe the transactions:

- The first transaction records the sale of accounts receivable to a factor, whereas the second transaction records a sale that was paid using a national credit card.

- The journal entry for the sale of receivables to a factor requires a debit to Cash (asset), a debit to Service Charge Expense (stockholders' equity), and a credit to Accounts Receivable (asset). Therefore, it affects two asset accounts and one stockholders' equity account. In contrast, the journal entry for a sale paid with a national credit card requires a debit to Cash (asset), a debit to Service Charge Expense (stockholders' equity), and a credit to Sales Revenue (stockholders' equity). Therefore, it affects one asset account and two stockholders' equity accounts. A sale made with a store credit card does not dispose of accounts receivable; instead, it increases Accounts Receivable and increases Sales Revenue.

Explanation:

The assets owned by the company are recorded in the form of account known as asset account. Capital expenditures are debited to an asset account, and the expenditure is said to be capitalized. If the owner of the business increases the assets amount, the asset account will also be increased.

Equity account illustrates the financial representation of the ownership of a business. The payment made by the owner to the business or the earnings that are generated by the business are considered as equity. As the equity funds come from different sources, the equity is stored in multiple types of accounts.

6 0

3 years ago

Tanner-UNF Corporation acquired as an investment $260 million of 5% bonds, dated July 1, on July 1, 2021. Company management is

nordsb [41]

Answer:

Tanner-UNF Corporation

a. Journal Entry

July 1, 2021:

Debit Investment in Bonds $260 million

Credit Discount on bonds $60 million

Credit Cash $200 million

To record the acquisition of bonds.

December 31, 2021:

Debit Cash $6.5 million

Debit Discount on bonds $0.5 million

Credit Interest Revenue $7 million

To record cash received from bond investment and amortization of the bond discount for the semi-period.

b. Debit Unrealized Bonds Investment Loss $45 million

Credit Investment in Bonds $45 million

To record the unrealized loss on the investments.

Explanation:

a) Data and Calculations:

July 1, 2021:

Face value of bonds = $260 million

Interest rate = 5%

Market interest rate = 7%

Payment for the bonds = $200 million

Discount on bonds = $60 million

December 31, 2021:

Semi-annual interest cash receipts = $6.5 million ($260m * 2.5%)

Semi-annual interest revenue = $7 million ($200m * 3.5%)

Amortization of bonds discount = $0.5 ($7 million - $6.5 million)

Fair value of bonds = $215 million

3 0

3 years ago

Discounting A. A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs.

uranmaximum [27]

Answer:

PMT x {[(1 + r)^n – 1]/r}

Explanation:

The formula for calculation the future value of an ordinary annuity is given as :

PMT x {[(1 + r)^n – 1]/r} ;

Where ;

PMT = Payment amount ; r = discount rate

n = number of payments

For ordinary annuity, payment are made at the end of each period as opposed payment made at the beginning of the period for annuity due.

3 0

3 years ago

If a firm averages $2,000 in daily credit sales and offers 60-day terms, the average accounts receivable balance will be $120,00

Alexeev081 [22]

Answer:

a. True

Explanation:

The computation of the average accounts receivable balance is shown below:

= Daily credit sales × day terms

= $2,000 × 60 days terms

= $120,000

We simply multiplied the average amount with the day term so that the average account receivable balance could come

Hence, the given statement is true

Therefore the correct option is a.

8 0

3 years ago