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mojhsa [17]
2 years ago
5

On June 30, 2012, Mackes Company issued $5,000,000 face value of 13%, 20-year bonds at $5,376,150, a yield of 12%. Mackes uses t

he effective interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
Prepare the journal entries to record the following transactions.
a. The issuance of the bonds on June 30, 2012.
b. The payment of interest and the amortization of the premium on December 31, 2012.
c. The payment of interest and the amortization of the premium on June 30, 2013.
d. The payment of interest and the amortization of the premium on December 31, 2013.
Business
1 answer:
mestny [16]2 years ago
4 0

Answer:

Explanation:

a. Dr Cash   5,376,150

Cr Premium on bonds payable  376,150

Cr Bonds payable 5,000,000

b. Dr Interest expense 322,569

Dr premium on bonds payable 2431

Cr Cash 325,000

c. Dr Interest expense 322,423

Dr Premium on bonds payable 2577

Cr Cash 325,000

d. Dr Interest expense 322,269

Dr premium on bonds payable 2731

Cr Cash 325,000

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Answer:

$330,846

Explanation:

The computation of the  the revised break even point in dollars is shown below:

= (Fixed cost ) ÷ (Profit volume ratio)

where,  

Fixed cost = $163,200 + $8,840

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And the profit volume ratio would be

= (Contribution margin) ÷ (Sales) × 100

where Contribution margin equal to

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= $70 - $28 + $5.60

= $36.4

So, the profit volume ratio is

= ($36.40) ÷ ($70)

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So, the revised break point in dollars is

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4 0
2 years ago
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Answer:

a. callahanb

Explanation:

Conservative investment strategy means investing in a less risky asset so the there is certain cash flow . Investment in govt bonds or treasury bills or company debentures etc of good rating are example of conservative investment strategy.

Old timers should opt for conservative investment . It is so because their risk bearing capacity is low. They can be reined in case of any windfall loss .

They have fixed liability in the form of medical expenses etc.

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7 0
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djverab [1.8K]

Answer:

Paying more cash to its creditors and stockholders than the amount it received from them (1)

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Answer:

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I hope the answer was helpful.

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