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kotegsom [21]
2 years ago
4

Three years ago American Insulation Corporation issued 10 percent, $910,000, 8-year bonds for $825,000. Debt issue costs were $5

,000. American Insulation exercised its call privilege and retired the bonds for $900,000. The corporation uses the straight-line method both to determine interest and to amortize debt issue costs.
Required:

Prepare the journal entry to record the call of the bonds.
Business
1 answer:
GuDViN [60]2 years ago
3 0

Answer:

                                        Dr.           Cr.

Bond Payable            $910,000

Loss on retirement    $43,125

Discount                                      $53,125

Cash                                            $900,000

Explanation:

The discount given on the issuance of the bond is amortized over the period of bond till maturity. On the call date on 3 years had passed so, the remaining balance of 5 year will be adjusted in the calculation of profit / loss on the retirement of bond.

Discount on issuance of bond = $910,000 - $825,000 = $85,000

Discount amortization per year = $85,000 / 8 = $10,625

Total Discount amortized after 3 years = $10625 x 3 = $31,875

Un-amortized Bond discount = $85,000 - $31,875 = $53,125

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Neporo4naja [7]

Answer:

Jacob made a mistake at the Initiation stage of the project management process  

Explanation:

The initiation stage is the first stage in every project cycle. It is the stage of defining the objectives, scope, purpose and  deliverable to be produced.

If this stage of project management had been well managed the project might not have failed because the employees would have been guided on the trends to follow to achieve the  various goal and objectives set for each projects.

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2 years ago
This table shows the number of cookies several bakeries sell each day. Bakery Number of Cookies Sold Mrs. Track’s 90 Chips 100 T
Serggg [28]

Answer: d. Uncle John's

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6 0
2 years ago
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Problem 5-30 Graphing; Incremental Analysis; Operating Leverage [LO5-2, LO5-4, LO5-5, LO5-6, LO5-8][The following information ap
WARRIOR [948]

Answer:

Break Even Point

In Units = 2,000 units

In value = $80,000

Explanation:

Break even Point = \frac{Fixed\ Cost}{Contribution}

When we use contribution per unit, we get the break even point in units sales.

When we use the contribution margin as a percentage of sales we get break even sales in value.

Contribution per unit = $20

Contribution margin in percentage = $20/$40 = 50%

Therefore, Break even Point in units = \frac{40,000}{20} = 2,000

Break even units = 2,000

Break Even Point in value = \frac{40,000}{0.50} = 80,000

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8 0
2 years ago
Your customer purchases FYZ 4% convertible preferred stock at $60 per share. The conversion price is $10. With the common stock
KIM [24]

Answer:

$9

Explanation:

Calculation for how much the common shares of FYZ are trading

First step is to find the conversion ratio

Using this formula

Conversion ratio =Market price of the convertible+Conversion price)/Conversion price

Let plug in the formula

Conversion ratio=$70/$10

Conversion ratio=7

Second step is to calculate for the Parity price of the common stock

Using this formula

Parity price=Market price of the convertible / conversion ratio

Let plug in the formula

Parity price=$70/7

Parity price=$10

Last step is to calculate how much the common shares of FYZ are trading

Using this formula

Common shares =Parity price-Common stock trading point

Let plug in the formula

Common shares =$10-1

Common shares=$9

Therefore the common shares of FYZ are trading at $9

6 0
2 years ago
If the Sampson Company, a supplier of wood, understands the needs and requirements for wood for a few firms within a NAICS class
Helen [10]

Answer:

The answer is "Option c".

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The customer service must matter arising' needs to fulfill everyone. The Sampson Company, a timber manufacturer, understands the wood specifications or conditions for several firms within the NAICS category. Within this case, the Dunn Company will develop the timber specifications or criteria of all firms underclass.

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