Shana Corporation is planning to issue bonds with a face value of $680,000 and a coupon rate of 7.5 percent. The bonds mature in 8 years and pay interest semiannually every June 30 and December 31 . All of the bonds were sold on January 1 of this year. Shana uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (EV of $1. PV of $1. EVA of $1, and PVA of $1) Required: 1.&2. Prepare the journal entries to record the issuance of the bonds and interest payment on June 30 of this year. 3. What bonds payable amount will Shana report on its June 30 balance sheet?
Answers
Shana will report $513,498.12 as the bonds payable amount on its June 30 balance sheet. The bonds payable amount Shana will report on its June 30 balance sheet is the carrying value of the bonds. The carrying value is the face value of the bonds minus the unamortized discount.
Journal entries to record the issuance of the bonds:
On January 1:
Debit: Cash ($680,000 - the face value of the bonds)
Credit: Bonds Payable ($680,000 - the face value of the bonds)
The journal entry to record the interest payment on June 30:
On June 30:
Debit: Interest Expense (calculated as 7.5% of the face value of the bonds for 6 months)
Debit: Discount on Bonds Payable (amortization of the discount for 6 months)
Credit: Cash (payment of the interest amount)
The bonds payable amount Shana will report on its June 30 balance sheet is the carrying value of the bonds. The carrying value is the face value of the bonds minus the unamortized discount.
To calculate the unamortized discount, we need to determine the total amount of discount over the bond's life. The difference between the face value and the present value of the bond's future cash flows represents the discount.
Using the present value of $1 table, we can calculate the present value of the bond's future cash flows. Considering semiannual interest payments, the number of periods is 16 (8 years x 2). With a market rate of interest of 8.5%, we find the present value factor to be 0.4773.
Present Value of Bond = Face Value × Present Value Factor
Present Value of Bond = $680,000 × 0.4773 = $324,796
The discount on the bond is the difference between the face value and the present value of the bond:
Discount = Face Value - Present Value
Discount = $680,000 - $324,796 = $355,204
To determine the unamortized discount on June 30, we need to calculate the amortization for the 6 months since issuance. The annual amortization expense is determined by dividing the total discount by the bond's life:
Annual Amortization Expense = Discount / Number of Periods
Annual Amortization Expense = $355,204 / 16 = $22,200.25
Amortization for 6 months = (Annual Amortization Expense / 2) × Number of Periods Remaining
Amortization for 6 months = ($22,200.25 / 2) × 15 = $166,501.88
Bonds Payable on June 30 = Face Value - Unamortized Discount
Bonds Payable on June 30 = $680,000 - $166,501.88 = $513,498.12
Therefore, Shana will report $513,498.12 as the bonds payable amount on its June 30 balance sheet.
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Related Questions
How a drug company made $114 billion by gaming the u.s. patent system ?
Answers
AbbVie, the company that makes Humira, prevented rivals from entering the market by cleverly but lawfully exploiting the US patent system.
How long is a US patent valid?
154 to state that a patent's term (apart from design patents) starts on the day it is issued and ends 20 years from the day the application for the patent was submitted in the United States.
What three sorts of U.S. patents are there?
Utility, Design, and Plant are the three different categories of patents. Any individual who creates a novel and useful method, apparatus, product, or material composition—or any novel and beneficial advancement thereof—may be eligible to receive a utility patent.
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abigail bought 28 shares of stock at $30.00 per share. she received dividend of $49.50 during the year. at the end of the year, her stock was valued at $43.50 per share. what was her ROI?
Answers
If her stock was valued at $43.50 per share. Her ROI is:50.89%
Return on investmentFirst step
Purchase price=(28×$30)-(28×$43.50)
Purchase price= $840-$1218
Purchase price=$378
Gain in value=$378+ $49.50
Gain in value=$427.5
Second step
ROI=$427.5/$840×100
ROI=50.89%
Therefore the ROI is $15.89%.
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Many rapidly growing firms are outsourcing areas like engineering, design, and manufacturing with the use of the internet, thus, developing a(n) _________ approach to operations management.
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Many rapidly growing firms are outsourcing areas like engineering, design, and manufacturing with the use of the internet, thus, developing a(n) inter-firm approach to operations management.
What is inter-firm approach?Inter-firm approach can be defined as the type of approach put in place by companies or organization that enables them to analyze themselves or the type of business they does or engage in.
Most companies that tend to make use of this type of approach does that so as to check for any lapses and they find way to improves the lapse which inturn can tend to lead to effective smooth running of their business operation.
Therefore the blank space is inter- firm approach.
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how has smartphones product changed the way business is conducted? What business innovations have occurred as a result of this product being offered?
Answers
answer amd explanation: i think smartphones are a distraction.
Refer to the follwing about 3 hypothethical perfectly competetive firms cost at their profits maximizing outputs. For each firm answer the listed questions.
Firm 1
Price=$150
ATC=$140
AVC= $130
Firm 2
Price=$150
ATC=$160
AVC=$130
Firm 3
Price=$150
ATC=$160
AVC=$155
Will each of these firms earn economic profit break even or incur losses? Explain why and show your work.
Calculats the per unit profit or loss if there are any for each firm.
Will each of thess firms make a decision to continue production at the current output or will maks a decision to shut down?
Answers
Firm 1 will earn economic profit while Firms 2 and 3 will incur losses. Firms 2 and 3 will make a decision to shut down in the short run as they are incurring losses.
Firm 1:
This firm will earn economic profit as the price ($150) is higher than both the average total cost ($140) and the average variable cost ($130).
Per unit profit = Price - ATC = $150 - $140 = $10
Decision: This firm will continue production at the current output as it is making a profit.
Firm 2:
This firm will incur losses as the price ($150) is lower than the average total cost ($160).
Per unit loss = ATC - Price = $160 - $150 = $10
Decision: This firm will make a decision to shut down in the short run as it is incurring losses.
Firm 3:
This firm will also incur losses as the price ($150) is lower than the average total cost ($160).
Per unit loss = ATC - Price = $160 - $150 = $10
Decision: This firm will make a decision to shut down in the short run as it is incurring losses.
Firm 2 and Firm 3:
Both Firm 2 and Firm 3 are incurring losses. In the short run, they may still choose to continue production as long as their price is covering their average variable cost (AVC).
However, in the long run, if they consistently experience losses, they may consider shutting down or adjusting their production levels to minimize losses.
In summary:Firm 1 earns economic profit, Firm 2 and Firm 3 incur losses, and the decision to continue production or shut down depends on the specific circumstances and time frame.
As for the decision to continue production or shut down, firms in perfectly competitive markets compare the price with the average variable cost (AVC) to make that decision.
If the price is above the AVC, it is more favorable to continue production, but if the price is below the AVC, it is better to shut down.
In this scenario, since the price ($150) is higher than the AVC for all three firms ,they will all make the decision to continue production at the current output.
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A common advantage of a promotion is that ______. A. You will have longer hours b. Your relationships with your peers will change c. You will receive better pay d. You may have to learn to do new tasks Please select the best answer from the choices provided A B C D.
Answers
Answer:
C
Explanation:
In the classical model with fixed income, a reduction in the government budget deficit will lead to a?
Answers
In the classical model with fixed income, a reduction in the government budget deficit will lead to a lower real interest rate.
What is the effect of reduction in the government budget deficit ?A budget deficit can be described as the term that is been used to described the situation whereby government spending is greater than tax revenues.
It should be noted that the Reduction in the deficit can be gotten as a result of the tax increases as well as the cuts in government spending , and sometimes a a period of GDP growth that can be seen to result to rise in direct as well as indirect tax revenues, hence In the classical model with fixed income, a reduction in the government budget deficit will lead to a lower real interest rate.
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In the Blank______ budgeting method of setting a promotion budget, the budget is set by matching the competitor's absolute level of spending or the proportion per point of market share.
Answers
In the Competitive Parity budgeting method of setting a promotion budget, the budget is set by matching the competitor's absolute level of spending or the proportion per point of market share.
What does this approach do?This approach ensures that a company maintains a competitive position in the market by allocating a similar amount of resources to promotional activities as its competitors.
By doing so, the company aims to avoid being outspent by competitors, which could lead to a loss in market share.
The Competitive Parity method helps companies stay on par with industry standards and maintain a stable presence in the market.
Hence, the answer is Competitive budgeting.
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Administrative agencies have the power to investigate: Potential violations of any administrative law or federal statute. Potential violations of applicable state or federal statutes. Potential violations of the agency's rules or applicable statutes.
Answers
Administrative agencies have the authority to look into: Potential infractions of the agency's regulations or relevant laws.
Which administrative agency do you mean?The basic definition of an administrative agency is an official government body with the power and responsibility to oversee, direct, and carry out specific laws or ordinances. The word "agency" does not appear in the titles of all administrative agencies. a government agency with the power to create more exacting and complex rules than are conceivable in a legislative environment in order to carry out legislative mandates. Law enforcement duties are carried out by numerous administrative organisations. The President is generally in charge of administrative agencies.
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What is the central message of almost every sermon in Acts? The resurrection. The death of Jesus. The coming of the Holy Spirit. Eternal life.
Answers
The central message of almost every sermon in Acts is the hope of the resurrection and eternal life through Jesus Christ.
Every sermon in Acts emphasizes the death of Jesus as a sacrifice to save mankind from their sins, and the coming of the Holy Spirit as a sign of God's favor and an assurance of eternal life. This hope of eternal life is the main point of almost every sermon in Acts.
The resurrection of Jesus is seen as the ultimate proof of God's love for us, and as the ultimate source of hope for eternal life. The Holy Spirit is seen as the source of comfort and assurance of salvation through Jesus.
Every sermon in Acts reminds us that Jesus' death and resurrection were for the purpose of providing us with eternal life, and of bringing us into a relationship with God. In short, the central message of almost every sermon in Acts is the hope of the resurrection and eternal life through Jesus Christ.
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a preliminary estimate for the cost of a parking garage can be made using the unit cost method. if the cost per parking space is $19,700, what is the estimated cost for a 600-space garage?
Answers
To estimate the cost of a 600-space parking garage using the unit cost method, we can simply multiply the cost per parking space by the total number of spaces. Therefore, the estimated cost for a 600-space garage would be $11,820,000 ($19,700 x 600).
The unit cost method is commonly used in construction projects to estimate the cost of a project based on the cost per unit. In the case of a parking garage, the cost per parking space can be used as the unit cost. To calculate the estimated cost for a 600-space garage, we need to multiply the cost per parking space by the total number of spaces. Given that the cost per parking space is $19,700, the calculation would be as follows:
Estimated cost = Cost per parking space x Total number of spaces
Estimated cost = $19,700 x 600
Estimated cost = $11,820,000
Therefore, the estimated cost for a 600-space garage using the unit cost method would be $11,820,000. It's important to note that this is only a preliminary estimate, and the actual cost may vary depending on several factors such as location, materials, and labor costs.
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difference betwee auditor and finance managys
Answers
Answer:
Image result for difference between auditor and finance manager
Auditor ensures that the businesses are saved from any fraud by highlighting any discrepancies undertaken in accounting methods whereas a Finance manager provide with accurate and detailed financial reports which are vital for the profitability of the business.
Explanation:
if the consumer division is eliminated, $1,600,000 of the above fixed expenses could be avoided. what will be the effect on xampa's profit next year if consumer division is eliminated?
Answers
Xampa will save $1,600,000 in fixed costs if it closes its Consumer Division, but it will still owe $2,100,000 - $1,600,000 = $500,000 in fixed costs.
Consumers are individuals or groups that do not participate directly in entrepreneurial or business activities and who intend to order or utilise acquired goods, services, or experiences largely for their own social, familial, household, or other purposes. The person who buys things for their personal use is the one who uses the phrase the most frequently. President John F. Kennedy presented the US Congress with his definition of consumers on March 15, 1962. He said, "By definition, consumers encompass all of us." The idea for World Consumer Rights Day, which is now celebrated on March 15, was inspired by this lecture. John F. Kennedy emphasised in his speech that it is a fundamental responsibility of the government to support citizens in asserting their rights on behalf of consumers.
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The stock is currently selling for $15.25 per share, and its noncallable $1,000 par value, 20-year, 7.25% bonds with semiannual payments are selling for $875.00. the beta is 1.25, the yield on a 6-month treasury bill is 3.50%, and the yield on a 20-year treasury bond is 5.50%. the required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. the firm's tax rate is 40%. based on the capm, what is the firm's cost of equity?
Answers
Answer: 0.1525
Explanation:
Given the following :
Market average annual return(Rm) = 14.50% = 0.145
Required return on stock(Rf) = 11.50% = 0.115
Beta (B) = 1.25
Using the Capm, cost of equity(Ke) is given as :
Ke = Rf + B(Rm - Rf)
Ke = 0.115 + 1.25(0.145 - 0.115)
Ke = 0.115 + 1.25(0.03)
Ke = 0.115 + 0.0375
Ke = 0.1525
Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 15 years to maturity that is quoted at 106 percent of face value. The issue makes semiannual payments and has an embedded cost of 9 percent annually. Note the embedded cost refers to the coupon rate.
Required:
(a) What is the company's pretax cost of debt? (Do not round your intermediate calculations.)
(b)If the tax rate is 36 percent, what is the aftertax cost of debt? (Do not round your intermediate calculations.)
Answers
The company's pre-tax cost of debt is 8.29% and If the tax rate is 36 percent, 5.31% is the after-tax cost of debt.
a) Mid-annual payments=9/100×1000/2= 45
Price = 106/100×1000 = $1060
1060 = $45/(1+r÷2) + 45/(1+r÷2)^2
r=8.29%
Therefore the company's pre-tax cost of debt will be 8.29%
b)After-tax cost of debt=8.29/100×(1-36/100)
=5.31%
Which cost of debt is more important, before or after taxes?
Because it reflects the true cost of debt to the business, the after-tax cost of debt is more important. Because interest is a tax-deductible expense, the total amount we pay is lowered to the degree that taxes are saved by deducting the interest.
Why do we use the after-tax cost of debt?
Knowing how much a business can save on taxes as a result of the interest it paid over the course of the year is the main advantage of assessing the after-tax cost of debt. Therefore, in order to comprehend their whole cost of debt, firms must be aware of their effective tax rate.
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5. The measurement of how happy the customer is with their shopping experience with a retailer is called:
O A. Product solutions
O B. Brand knowledge
O C. Customer satisfaction
O D. Product knowledge
Answers
How does business generate income?
Answers
Hai!
This depends on the Type of Business.
If it is a Selling Business, they sell stuff to Earn Profit.
If its a Free Online Website/Game. They earn money by either in game purchases or Web Site purchases.
High inventory turnover is beneficial because it allows you to do which of the following? a. Respond to changes in the marketplace more fficiently b. Free up cash because of the reduction in length of the cash-to-cash cycle c. Buy more inventory d. Both a and b
Answers
High inventory turnover is beneficial because it allows you to do both a and b.
This means that you can respond to changes in the marketplace more efficiently and also free up cash because of the reduction in length of the cash-to-cash cycle.
By having a high inventory turnover, you are able to quickly move products and adapt to changes in demand in the marketplace.
Additionally, a high inventory turnover means that you are not holding onto inventory for long periods of time, which frees up cash that can be used for other purposes.
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When a magazine company collects cash for selling a subscription, it is an example of: Group of answer choices
Answers
Answer:
A deferred revenue transaction
Explanation:
Magazine subscriptions are payments made for future editions of a magazine. When the magazine is eventually produced it is delivered to the customer.
So when the magazine company collects cash for a subscription they are being paid for a service that is not yet rendered.
As revenue is recognised when the when it is earned (when service has been rendered), this is classified as a deferred revenue transaction.
what is the biggest attraction for business considering enganing in international business?
A. The lack of domestic resources
B. The cost of labor
C. The number of burdensome regulations
D. The size of the market
Answers
This is because they have an idea that with a larger market size the can gain economies of scale and make a larger profit.
Why is it called Chick-Fil-A when a Fil-A (filet) is normally cooked with beef???
Answers
please help with this question :0
Answers
Answer:
darling, soes it have a read?
Explanation:
place rock unit events in order.
3. (Note: The surface is not a layer. It is ground-level, complete with happy little trees.) \( \mathrm{A} 3 \) Homework \( - \) Unanswered Place the rock units events in order from oldest on bottom t
Answers
To place the rock unit events in order from oldest to youngest, we need to consider the principle of superposition, which states that in an undisturbed sequence of rock layers.
1. Homework: This event is the most recent one as it is mentioned last in the given list.2. A3: This event is mentioned before Homework, suggesting that it occurred earlier than Homework.3. Unanswered: This event is mentioned before A3, indicating that it happened before A3.Therefore, the correct order from oldest to youngest is: Unanswered → A3 → Homework.we need to consider the principle of superposition, which states that in an undisturbed sequence of rock layers, the youngest rocks are on top, while the oldest rocks are at the bottom.
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Charitable donations, entertainment expenses, and
financial goals are all examples of...
things to consider when creating a budget.
things that are considered needs.
activities that contribute to overspending.
activities that are necessary for a healthy lifestyle.
Answers
Answer: Things to consider when creating a budget.
Explanation: Trust me bro
Giving donations, entertainment costs, and financial goals are all examples of the things to consider when creating a budget. As donation and entertainment expenses can be the measures to control the budgeting.
How making budget is helpful?Budget keeps the person spending tightly accurate to the mark and like to help in saving of the money. It facilitates the person income and expenses equally and shows how much person can spend on the specific thing.
Budget cuts the extra expenses of the person and provide the measurement of spending.
Thus, option A is correct.
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A forensic accountant is similar to a(n) ______
because they both work to combat accounting fraud
A. international accountant
B. auditor
C. certified public accountant
D. general ledger accountant
SUBMIT
Answers
Answer:
B. auditor
Explanation:
The work of an auditor and that of the forensic accountants are very similar. They both examine financial records and statements of an organization to confirm their accuracy. The auditor and forensic accountant are specialized officers. They have been trained to detect fraudulent reporting in financial statements. After evaluating the books of account, they form an opinion based on their findings.
: college graduates are paid more, on average, partly because the act of finishing college signals that they are more likely to be a good employee. college graduates are paid more, on average, partly because the act of finishing college signals that they are more likely to be a good employee. false true
Answers
It is true that college graduates are paid more, on average, partly because the act of finishing college signals that they are more likely to be a good employee.
As the third decade of the twenty-first century begins, concerted efforts are required to transform the American economy into one that offers all citizens the chance to advance socially and economically, stems the tide of rising inequality, satisfies the labor market's demand for skilled, nimble, and knowledgeable employee, and expands the scale and scope of new jobs being created. One of the main concerns of all Americans is raising wage growth so that people can benefit from a thriving economy and accumulate the wealth they and their families need to ensure future prosperity for both themselves and the country. Government policies that influence the economic fundamentals that support these outcomes will address this issue.
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Which results are more likely for someone without personal finance skills? Select three options.
larger long-term credit or loan costs
less preparation for emergencies
fewer utility expenses
simple long-term investment strategies
increased long-term challenges
Answers
Answer:
1,2 & 5
Explanation:
Answer:
1, 2, 5
Explanation:
edge 2021
Which of the following is NOT a useful strategy when making an informed purchase?
1.Compare your option to similar products.
2.Calculate the unit price of the product.
3.Read the online reviews of the product and ask trusted friends who use it.
4.Purchase a product based on a social media influencer.
Answers
this would not be an informed purchase
in scheduling your time, which of the following will help you reach your goals?
a) limit the time you spend on each task
b) finding ways to multi-task
c) sticking to a daily routine
d) all of the above
Answers
Answer:
d) all of the above
Explanation:
they all help you reach your goals
Why would finance charges be applied to a customer with a credit card?
• if the customer did not use the car
• if the customer paid the entire bill
• if the customer did not pay off the entire bill
if the customer charged the maximum amount
Answers
Answer:
Finance charges are applied to a customer with a credit card if the customer did not pay off the entire bill. Here are the reasons why:
Credit cards allow customers to borrow money from the credit card company to make purchases.When a customer uses a credit card, they are essentially taking out a loan from the credit card company.The credit card company charges interest on the loan, which is known as a finance charge.If the customer pays off the entire bill by the due date, they will not be charged any finance charges.However, if the customer does not pay off the entire bill, the remaining balance will be subject to finance charges.Finance charges are typically calculated based on the average daily balance of the account over the billing cycle.The finance charges will continue to be applied until the customer pays off the entire balance.Therefore, if the customer did not pay off the entire bill, finance charges will be applied, regardless of whether they used the card, paid the entire bill, or charged the maximum amount.