In: Accounting
Please answer questions in the order listed. You do not need to be completely correct, but I do need to see an honest effort. For this post, YOU MUST SHOW YOUR WORK, on any question requiring math. This is to make it so that I can see where exactly where you mis-stepped in your calculation or logic, and/or so that your classmates can learn from you.
5.) MicroServe needs $100,000 to upgrade its warehouse. Dayna, the CEO of MicroServe, thinks they can put off the upgrade for 5 years. The company will make 5 annual deposits to fund this expansion. If the account earns 8% interest, how much does Dayna need to deposit every year? (Round your answers to the nearest dollar and show your work!!!)
6.) How is the carrying value of a bond computed?
7.) When the effective interest rate is higher than the stated interest rate on a bond issue, will the bond sell at a discount or premium? Why?
8.) Explain the difference between the straight-line and the effective interest method of amortization of bond premiums and discounts.