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3 years ago

Interest earned on both the initial principal and the interest reinvested from prior periods is called _______.

Business

1 answer:

scZoUnD [109]3 years ago

7 0

Answer:

interest earned on both the initial principal and the interest reinvested from prior periods is called compound interest.

________________________________

Compound interest. The interest which is added on to the initial investment, so that this will itself gain interest in subsequent periods.

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National Orthopedics Co. issued 8% bonds, dated January 1, with a face amount of $550,000 on January 1, 2021. The bonds mature o

loris [4]

Answer:

1) the price of each bond:

PV of face value = $1,000 / 1.05⁸ = $676.84

PV of coupon payments = $40 x 6.4632 (PV annuity factor, 5%, 8 periods) = $258.53

market price per coupon = $935.37

2) journal entry to record issuance of the bonds:

January 1, 2021, bonds issued at a discount

Dr Cash 514,453.50

Dr Discount on bonds payable 35,546.50

Cr Bonds payable 550,000

3) I used an excel spreadsheet

4) June 30, 2021, first coupon payment

Dr Interest expense 25,722.68

Cr Cash 22,000

Cr Discount on bonds payable 3,722.68

5) December 31, 2024, last coupon payment

Dr Interest expense 27,236.45

Cr Cash 22,000

Cr Discount on bonds payable 5,236.45

December 31, 2024, bonds are redeemed

Dr Bonds payable 550,000

Cr Cash 550,000

Download pdf

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3 years ago

Western Company is preparing a cash budget for June. The company has $12,000 cash at the beginning of June and anticipates $30,0

topjm [15]

Answer:

$2,500

Explanation:

Opening balance $12,000

Cash receipts $30,000

Cash disbursement ($34,500)

Closing balance $7,500

Minimum cash balance $10,000

Borrowing amount(1$0,000-$7,500) $2,500

To maintain $10,000 cash balance western company need to borrow $2,500($10,000-$7500)

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3 years ago

A ___________ is a consumer problem, need, or desire that a business could provide a solution for. A. Change or trend B. Company

Katen [24]

Business opportunity........

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3 years ago

Read 2 more answers

Outstanding stock of the Blossom Corporation included 30000 shares of $5 par common stock and 8000 shares of 5%, $10 par non-cum

Arlecino [84]

Answer:

$6,500 was distributed to preferred shareholders

Explanation:

Dividend distributed to preferred share is based on the predetermined rate associated with these share. When the dividend is declared preferred share dividend is paid first. The remainder is distributed between the common stockholders.

Value of Preferred share = 8000 shares x $10 par value = $80,000

Preferred Dividend = $80,000 x 5% = $4,000

Accrued dividend of 2016 = $4,000 - $1500 = $2500

Total Dividend Accrued = $2,500 + $4,000 = $6,500

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3 years ago

S corporation shareholders are subject to self-employment tax on business income allocations from the S corporation if they are

Mila [183]

Answer:

The statement is false

Explanation:

S corporations are pass through corporations, which means income earned is passed to the owners and they are taxed at individual level.

Shareholders of S corporation earns income in the form of wages and distributions. Wages are charged with payroll taxes. S corporation shareholders are not subject to self-employment taxes which is an advantage for them.

Therefore, the statement is false

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4 years ago