Answer:
Explanation:
Cash Payment to customers: $450,000 x contract rate of 9% x 1/2 = $20,250
Amortization of the premium: $11,795/6 periods = $1,966
Bond interest Expense: $20,250 - $1966 = $18,284
Answer:
Option (B) is correct.
Explanation:
For a 20 workday month,
cost of gas and productivity = $4 per day
cost of commuting = cost of gas and productivity × 20 workday month
= $4 × 20
= $80.
The total rent he is paying currently is $600 per month that does not include the commuting cost.
Hence, the individual must willing to pay a total of:
= Total rent + Cost of commuting
= $600 + $80
= $680 for an apartment downtown.
Thus, the total amount to be paid willingly is $680.
Answer:
D. All are legitimate constraints on the dividends that firms choose to pay to shareholders.
Explanation:
All of these are legitimate constraints.
For A, a company may simply have limited cash flows and as such can not pay any dividends. They may still be making profits and may declare dividends but the payment may not be made until subsequent period when cash is available.
For B, Bondholder covenants legally bind firms as issuing authorities from certain practices, for example a bond covenant may bind a firm to have interest cover of at least 2 times retained and as such there may be very little retained earnings left to pay for dividends.
For C, some forms of businesses like insurance companies or banks are restricted by law that they can not pay dividends if it means a capital reduction. These businesses have legal capital requirements that they must maintain and thus they cannot reduce capital in lieu of making dividend payments.
Hope that helps.
Answer:
Under the accrual basis, it should recognize $1,000,000 as property tax revenue for the year 2019. The remaining $45,000 that it does not collect in year 2019 will be accounted for as Property Tax Receivable while the $5,000 will be recorded as Uncollectible Expense in 2019.
Explanation:
The accrual concept or basis of accounting requires that all revenues and expenses relating to a fiscal year be recognized in that accounting year. It is not only the actual cash receipts and payments that should be recognized. This means that any revenue that is due but not yet received will be accounted for in the year that the revenue arises. And all the related expenses for raising the revenue will also be accounted for in the same year.
Answer:
Dr interest expense $7,000
Dr notes payable $7,238
Cr cash $14,238
Explanation:
The first task is to compute interest expense on the loan in year 1 which is shown below:
interest expense=$100,000*7%
interest expense=$7,000
Principal repayment=repayment-interest repayment
Principal repayment=$14,238-$7,000=$7,238
The double entries are to debit interest expense and notes payable with $7,000 and $7,238 respectively while cash is credited with $14,238 as an outflow of cash.
