Answer:
A) Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. FINANCIAL ASSET CREATED: when the loan was received, a financial asset was created. Money is exchanged for a promissory note.
B) Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software. REAL ASSET CREATED: when the software was developed, a real asset was created. Money was invested in developing the software.
C) Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,500 shares of Microsoft stock. FINANCIAL ASSET CREATED: when the software was traded, a financial asset was created. A real asset was traded in exchange for financial assets.
D) Lanni sells the shares of stock for $80 per share and uses part of the proceeds to pay off the bank loan." FINANCIAL ASSET DESTROYED: when the loan is paid back, the financial asset (loan) ceases to exist. When the money is paid back to the bank, the loan and the promissory note cease to exist.
Answer:
The answer is: D) Get massive loans from the Fed
Explanation:
Remember the phrase too big to fail? Most American "big" banks were at the brink of bankruptcy and the whole global financial system was about to collapse. At this point the US government loaned them money, tons of money, to avoid them from going bankrupt. In order for big banks to be eligible for those bank loans, they had to become bank holding companies.
Answer:
-11.8%
Explanation:
the key to answer this question is to remember that valuation of a bond depends basically of calculating the present value of a series of cash flows, so let´s think about a bond as if you were a lender so you will get interest by the money you lend (coupon) and at the end of n years you will get back the money you lend at the beginnin (principal), so applying math we have the bond value given by:
so in this particular case that one year later there are 29 years to maturity so we have:
so as we have a higher rate the investment has the next return:
Answer:
7.6 percent
Explanation:
Vaughn should offer 7.6 percent on its commercial paper.
This is calculated by adding the 0.2 credit risk premium to 0.1 percent liquidity premium + 0.3 percent tax adjustment + 7 percent annualized t bills rate.
= 0.1 + 0.2 + 0.3 + 7
= 7.6
Based on this Vaughn would offer 7.6 percent on its commercial paper.
Answer:
Explanation:
The journal entries are shown below:
On December 31:
Bad debt expense A/c Dr $4,875 ($487,500 × 1%)
To Allowance for Doubtful debts A/c $4,875
(Being bad debt expense is recorded)
On February 1:
Allowance for doubtful accounts A/c $580
To Accounts receivable A/c Dr $580
(Being the uncollectible amount is recorded)
On June 5:
Accounts receivable A/c Dr $580
To Allowance for doubtful accounts A/c $580
(Being allowance for doubtful accounts is recorded)
On June 5:
Cash A/c Dr $580
To Accounts receivable A/c Dr $580
(Being the amount received)
We assume the first entry is recorded on December 31
