1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
saveliy_v [14]
3 years ago
10

ABC Company received $9,631 for its 5-year, 10% bonds with a total face value of $10,000. The market rate of interest was 11%. T

he bonds pay interest annually on December 31. How much interest expense will ABC Corporation record on the first annual interest payment date using the effective-interest method?A. $1,059
B. $1,000
C. $1,074
D. $963.10
Business
2 answers:
Basile [38]3 years ago
8 0

Answer:

A. $1,059

Explanation:

Interest payment and interest expense of the bond issued on discount is different. The difference of both of these values is the amortization of discount on the bond, which is added to carrying value of the bond each year to make the carrying value equals to face value at maturity date.

Interest expense using effective interest method is calculated by multiplying the market interest rate to the net carrying value of the bond.

Carrying value of the bond in 1 st year = $9,631

Market Rate = 11%

Interest expense = $9,631 x 11% = $1059.41

Anastaziya [24]3 years ago
5 0

Answer:

The correct answer is Option A.

Explanation:

The effective interest rate (EIR) method is used when a bond is purchased at a discount or premium.

In the case of the question, the bond was purchased at $9,631 with a face value of $10,000. Interest expense is calculated as the bond price multiplied by the market rate, i.e. $9,631  x 11% = $1,059.41.

Therefore, ABC Company would record $1,059 on the first annual interest payment date using the effective-interest method.

You might be interested in
Walmart What should you do if you cannot fit an entire case on the shelf
Fofino [41]

Answer & Explanation:

If there is no other place for it. The case must be put back together and returned to the back room to be stored. There are times where it is acceptable to return a partial case to the back. An example is if a customer asks for an item out of the box.

6 0
3 years ago
Will the fact that the euro has become the standard currency in the EU help or hinder a new McDonald's franchise in Europe?
Tju [1.3M]

mmfnfmmfnnhngnnng

ts.iOD6DYOYDO.toss.to.taia.tgamys.k.syky.soky.sSLYi

5 0
2 years ago
Read 2 more answers
In an enterprise resource planning (ERP) system, the _____ component provides information on production costs and pricing.
posledela

Answer: manufacturing

Explanation:

In an enterprise resource planning (ERP) system, the manufacturing component provides information on production costs and pricing.

Enterprise Resource Planning is the gathering and organization of business data by using an integrated software suite.

It should be noted that ERP software typically contains applications that helps in automating certain business functions such as sales quoting, production, accounting etc

5 0
3 years ago
What is price discrimination and how do movie theaters and restaurants practice price discrimination?​
marishachu [46]
Price discrimination is the action of selling the same product at different prices to different buyers, in order to maximize sales and profits. Movie theaters practice it by giving discounts on certain night. Example: senior citizens discount. Restaurants practice price discrimination by menu pricing.
7 0
3 years ago
Select the correct answer. Which form of relativism states that people rely on their own standards of right and wrong when makin
Sladkaya [172]

E. Naive relativism

Explanation:

Naive relativism is based on the belief that humans ha e a deep seated view of what is right and what is wrong and can judge things by their own standards and make a decision.

<u>These decisions are thus treated as truth derived from one's own self by the person who is concerned. </u>

Naive relativism means that people also project their sense of right and wrong over others and sort of treat it as if it is universal.

7 0
3 years ago
Other questions:
  • A company's total marketing communications mix consists of a special blend of advertising, sales promotion, public relations, pe
    11·1 answer
  • BE22-4 Gundy Company expects to produce 1,200,000 units of Product XX in 2017. Monthly production is expected to range from 80,0
    15·1 answer
  • Which of the following describes the expected outcome of expansionary monetary policy in the short run?
    14·1 answer
  • You are part of an Information Systems project team. Your job is to ensure that the technology and vendor suggested for use in t
    11·1 answer
  • What branches or specializations concentrate their efforts and work on business, work and life satisfaction in psychology ?
    7·1 answer
  • 2. Specify which of the following cash transactions would have resulted in the $2,500 posting to the account. (You may select mo
    10·1 answer
  • In order to make a résumé persuasive and not self-centered, omit the use of the word _____.
    9·2 answers
  • Zhang Industries budgets production of 400 units in June and 410 units in July. Each finished unit requires 5 pounds of raw mate
    5·1 answer
  • Jake Shirt Co. used 5,300 square yards of polyester to produce 3,000 shirts. The standard quantity of material for the 3,000 shi
    12·1 answer
  • On January 1, 2020, Novak Corp. had inventory of $56,500. At December 31, 2020, Novak had the following account balances.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!