Answer:
The computation is shown below:
Explanation:
The journal entries are shown below:
a. Account payable $70,000
To Notes payable $70,000
(Being the issuance of the note is recorded)
b. Note payable $70,000
Interest expense $1,575
To Cash $71,575
(Being the payment of the note at maturity date including interest is recorded)
The computation is shown below:
= $70,000 × 9% × 90 days ÷ 360 days
= $1,575
We assume 360 days in a year
Now the effects on the accounts and the financing statement for issuance of the note is shown below:
Balance sheet
Assets = Liabilities + Stockholder equity Income statement cash flow statement
No effect = Account payable - $52,000 + No effect No effect + no effect
Note payable + $52,000
Answer:
D) all of the above
Explanation:
First find the present value for each alternative using PV of perpetual cashflow formula;
PV = CF / rate
CF = 50
If rate= 5%;
PV = 50/0.05 = $1,000
If rate = 2%;
PV = 50/0.02 = $2,500
With these two calculations, we see that;
-the bond price increased by $1,500
-you could sell this bond at a capital gain, meaning you can sell it a higher price that what you bought it for.
-at an interest rate of 2%, the speculative demand for money would increase
Hence , all these choices are correct!
Answer:
B. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows.
C. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows.
Explanation:
A Perpetuity is a financial instrument that pays the holder forever or in perpetuity. For example, a bank paying you $800 per year for ever because you invested $40,000.
There are certain characteristics
Option B
The Perpetuity like most financial Securities has its value based on the underlying cashflows that it can accumulate. This means that it's value is based on the present value of it's future cashflow so the other the cash payments, the higher the present value.
Option C.
As the discounted cashflows in the nearer future will be discounted less by the discount rate as opposed to the cash flows further in future, the cashflows nearer to the present in time will contribute more to the Perpetuity than the cashflows further in time.
For example using that first example, $800 per year at a rate of 5% will be discounted to $762 in the first year but in year 10 will be discounted to $491.
Answer:
a. $848,000
b. No
Explanation:
a. The calculation of consolidated equipment balance as of December 31, 2018 is shown below:-
Consolidated equipment balance = Equipment balance of Haynes + Equipment balance of Turner + Allocation based on fair value - Depreciation
= $500,000 + $300,000 + $5,000 - (($5,000 ÷ 5 × 2)
= $500,000 + $300,000 + $5,000 - $2,000
= $848,000
2. No it will not affect by the investment method applied by the parent.
Answer:
Timeshare properties
Explanation:
Numerous individuals or families own a timeshare property. Each owner is allocated a specified duration of time to stay in the property. Timeshare properties are common in the tourism sector and are located near popular vacation destinations.
The most common forms of timeshare properties are vacation resorts, condominiums, apartments, and campgrounds.
