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Novosadov [1.4K]
1 year ago
13

Sunland Company purchased $1200000 of 11% bonds of Scott Company on January 1, 2021, paying $1122375. The bonds mature January 1

, 2031; interest is payable each July 1 and January 1. The discount of $77625 provides an effective yield of 12%. Sunland Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2021, Sunland Company should increase its Debt Investments account for the Scott Company bonds by:________
Business
1 answer:
xz_007 [3.2K]1 year ago
3 0

Answer:

Sunderland Company should increase debt investment by $2,685.00  

Explanation:

Sunderland Company needs to increase its debt investments account for Scott Company bonds with the difference between effective interest earned on July 1 2021 minus the actual coupon interest received as shown below:

The actual interest revenue earned = $1122375*12%

                                                           =$ 134,685.00  

The coupon interest received=$1,200,000*11%

                                                 =$ 132,000.00  

In a nutshell,the investment in bonds earned interest of $134,685 but only $132,000 was received in cash,hence the difference of $2,685 is added to the bonds investment figure($134,685-$132,000)

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1 year ago
Marquez purchased some equipment for $58,750 on August 15, 2018.
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Answer:

$4,714

Explanation:

Given that,

Cost of equipment = $58,750

Equipment was subject to depreciation of $6,964 for 2018 and 2019.

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Capital gain = Net book value - Sale value

                    = $51,786 - $56,500

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Therefore, the Marquez recognize a gain of $4,714 on the sale of the equipment.

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1 year ago
The business of renting specialized construction equipment is highly competitive. In 2010, your company, Franklin Property Group
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__________ is a specialized accounting book, where transactions are categorized according to type. for example, all utility tran
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The Tierney Group has two divisions of equal size: an office furniture manufacturing division and a data processing division. It
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Answer:

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