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Vsevolod [243]
2 years ago
12

On January 1, Pacer Corporation issued $2,000,000, 13%, 5-year bonds with interest payable on July 1 and January 1. The bonds so

ld for $2,197,080. The market rate of interest for these bonds was 11%. On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for Select one: a. $260,000. b. $130,000. c. $142,810. d. $241,679. e. $120,839.
Business
1 answer:
wel2 years ago
7 0

Answer:

Option E, is correct as effective interest $ 120,839

Explanation:

The coupon interest payable semi-annually is computed thus:

Semi-annual coupon =13%/2*$2000000

                                  =$130,000

However the bond was issued at  premium, using effective interest the first interest payment is calculated on the actual issue value of the bond of $2,197,080 using the market rate of interest

effective interest=11%/2*$2,197,080

                           =$ 120,839.40  

Hence,the interest expense based on effective interest is  $120,839 rounded to the nearest whole number

Option D is wrong because the effective interest is a semi-annual interest not an annual one.

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On January 1, 20X9, Pitcher Corporation purchased 100 percent of Softball's stock. All tangible assets had a remaining economic
mina [271]

Answer:

The question is not complete,find attached complete question in word document.

Find all the journal entries in the attached spreadsheet

Explanation:

Please note the following points:

The goodwill is the excess of purchase consideration of $ 476,500.00  over the net assets of Softball acquired,that is $ 318,000.00  

The net assets is total assets acquired of $374,000 minus the liabilities taken over of $56000

Equity method income is the difference between Softball's net income reported and the dividends paid

Download docx
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> docx </span>
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> xlsx </span>
5 0
2 years ago
QUESTION 11 Given the following information, calculate the equity dividend rate for this investment: first-year NOI: $18,750; be
Alja [10]

Answer: D. 2.2%

Explanation: Equity Dividend Rate is calculated by dividing the Before Tax Cash Flow by the Acquisition price. If you need the answer in percentage form, you then multiply by 100.

Here, before-tax cash flow =  $11,440

Acquisition price = $520,000

So Equity Dividend Rate = \frac{11440}{520000} X 100

     Equity Dividend Rate = 2.2%

In this question, you do not need the Net Operating Income (NOI). You only need the NOI if the Before Tax Cash Flow is not given and the debt service payment is. If this is the case, you subtract the debt service payment from the NOI to get the Before Tax Cash Flow.

4 0
2 years ago
In your own words, briefly describe the benefit of each type of alert below: a. Low Balance b. Mobile Deposit c. Unusual Activit
pshichka [43]

Answer:

Explanation:

a. Low Balance: You can set up your bank account for this alert on a threshold which you want to make. This alert inform you about the low balance in your bank account when it touches to the threshold you set up that may be any amount for example 50$ or 500$ or 1000$ so that you know that you shouldn't . It facilitate you to safe from the expenses like OD etc.

b. Mobile Deposit. You always receive a text message whenever you used your smartphone to deposit the check with it. It may be act as a receipt for the check submission while using with your smartphone.It also provide you a facilitation when the check is cleared and deposit received in your bank account

c. Unusual Activity. This type of alert message received while bank detects an unusual activity which could be fraud etc.For example the transactions which are made unusual and which may not be your regular activity with your account.It could also occur when your account transaction has been made outside of your normal living etc area

2.

The most important type of alert would be the Unusual Activity as it involves the risk more that other two alerts.

5 0
1 year ago
Assume that the demand for tuna in a small coastal town is given by p = 400,000 q1.5 , where q is the number of pounds of tuna t
oee [108]

Answer:

(a) p = $ per lb

p = $2.12 per lb

(b) q = lb (c)

q = $23320

Explanation:

p=750000/q^1.5=>

p'=-1125000q^(-2.5)<0 always

=>p is decreasing with the  

increasing of q. So q should take

the allowable least value=5000.

=>

(a) the charge=  750000/(5000)^1.5=  $2.12/lb

(b)The max. revenue=

q = lb (c) = 2.12(5000)=  $23320

3 0
2 years ago
. Tiger Mfg. owns a manufacturing facility that is currently sitting idle. The facility is located on a piece of land that origi
klasskru [66]

Answer: $1,200,000

Explanation:

The firm should include $1,200,000 as the cost of the Manufacturing facility for a new project in it's analysis.

This is because $1,200,000 is the opportunity cost of not selling the facility. The old costs that were incurred for the land and the facility are to be considered sunk costs as they have already been incurred and the only relevant cost now is what the market will pay for the facility which is $1,200,000.

3 0
2 years ago
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