Accounting
On June 1, 2020, Shebandowan Investors Inc. issued a $4,800,000, 12%, three-year bond. Interest is to be paid semiannually beginning December 1, 2020. Assume that the market rate of interest is 13%. Use TABLE 14A.1 and TABLE 14A.2. (Use appropriate factor(s) from the tables provided.) Required: Part 1 Record the following entries: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
a. Issuance of the bonds on June 1, 2020
b. Payment of interest on December 1, 2020
c. Adjusting entry to accrue bond interest and discount amortization on January 31, 2021
d. Payment of interest on June 1, 2021 Assume Shebandowan Investors Inc. has a January 31 year-end.
Part 2
Show how the bonds will appear on the balance sheet under non-current liabilities at January 31, 2022. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
In: Accounting
On January 1, 2020, Flounder Company purchased 11% bonds, having
a maturity value of $320,000 for $344,893.28. The bonds provide the
bondholders with a 9% yield. They are dated January 1, 2020, and
mature January 1, 2025, with interest received on January 1 of each
year. Flounder Company uses the effective-interest method to
allocate unamortized discount or premium. The bonds are classified
as available-for-sale category. The fair value of the bonds at
December 31 of each year-end is as follows.
|
2020 |
$342,600 |
2023 |
$330,400 | |||
|---|---|---|---|---|---|---|
|
2021 |
$329,200 |
2024 |
$320,000 | |||
|
2022 |
$328,300 |
| (a) | Prepare the journal entry at the date of the bond purchase. | |
|---|---|---|
| (b) | Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. | |
| (c) | Prepare the journal entry to record the recognition of fair value for 2021. |
(Round answers to 2 decimal places, e.g. 2,525.25.
Credit account titles are automatically indented when amount is
entered. Do not indent manually. If no entry is required, select
"No Entry" for the account titles and enter 0 for the
amounts.)
In: Accounting
On October 15, 2016, Koala, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $60. [We are assuming that the 2020 coupon has just been redeemed.]
• Initially, the bond was sold for the premium price of $1,025.
• On October 15, 2020, this bond was selling for only $975.
• The market rate of interest for a riskless corporate bond, of this maturity, was 4.5% on October 15, 2016, which reflects market expectations about future rates of inflation.
• The market rate of interest for a riskless corporate bond, of this maturity, was 4.0% on October 15, 2020, which reflects market expectations about future rates of inflation.
Question: It is now October 15, 2020 and suddenly the Federal Reserve announces a massive program to reduce inflation. Instantly, the market rate of interest for a riskless corporate bond that would apply to this bond, falls from 4.0% to 2.5%. If there is no change in the risk premium expected for this Koala, Inc. bond, what will be this bond’s yield to maturity? [To 3 decimal places.]
In: Economics
Janice acquired an apartment building on June 4, 2020, for $1,600,000. The value of the land is $300,000. Assume Janice sold the apartment building on November 29, 2026.
If required, round your answers to the nearest dollar.
Click here to access the depreciation table to use for this problem.
a. How is the property classified for
MACRS?
b. What is the life of the asset for
MACRS?
c. Determine Janice's cost recovery deduction
for 2020 and 2026.
2020: $
2026: $
On April 30, 2019, Leo purchased and placed in service a new car that cost $78,600. The business use percentage for the car is always 100%. He does not take the additional first-year depreciation or any § 179.
If required, round your answers to the nearest dollar.
Click here to access the depreciation table of the textbook. Click here to access the limits for certain automobiles.
a. What MACRS convention applies to the new
car?
b. Is the automobile considered "listed
property"?
c. Leo's cost recovery deduction in 2019 is $ and for 2020 is $.
In: Accounting
Teal Construction Company has entered into a contract beginning
January 1, 2020, to build a parking complex. It has been estimated
that the complex will cost $597,000 and will take 3 years to
construct. The complex will be billed to the purchasing company at
$908,000. The following data pertain to the construction
period.
|
2020 |
2021 |
2022 |
||||
| Costs to date | $286,560 | $453,720 | $609,000 | |||
| Estimated costs to complete | 310,440 | 143,280 | –0– | |||
| Progress billings to date | 273,000 | 548,000 | 908,000 | |||
| Cash collected to date | 243,000 | 498,000 | 908,000 |
(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period.
| Gross profit recognized in 2020 |
| Gross profit recognized in 2021 |
Gross profit recognized in 2022
(b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period
| Gross profit recognized in 2020 |
Gross profit recognized in 2021
Gross profit recognized in 2022
In: Accounting
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In: Finance
1.) Winnie the Pooh Inc. issues 5,000 shares of $2 par common stock for $75 a share and 10,000 shares of $6 par preferred stock for $88 dollars per share. Journalize the issuance of these stocks:
2.) Winnie the Pooh Inc. the most generous of the companies declares a $200,000 cash dividend on April 1st, 2020. The company has 10,000 shares of $5 par common stock with a market value of $25 per share and 20,000 shares of $10 par 8% preferred stock with a $60 market value per share. The preferred stock is cumulative, and dividends were not paid in 2019. The date of record is April 20th, and the payment date is April 29th. Make the necessary journal entry showing exactly which shareholders will receive how much of each dividend, also be sure to perform the correct entry on the correct date: April 1st, 2020 journal entry: April 20th, 2020 journal entry: April 29th, 2020 journal entry:
In: Accounting
Champion Incorporated is a Canadian company that manufactures steel. On January 2, 2020, Champion purchased a building for $25,000,000 that it will use for manufacturing its products. The building has a useful life of 20 years with no estimated residual value. To comply with regulatory code, the government requires Champion to clean up the property on which the building is located at the end of the building’s useful life. Champion estimates that the clean up will cost $2,200,000. Assume that the clean up costs relate entirely to the purchase of the building, not to operations over the next 20 years.
The company’s discount rate is 5%. Champion adheres to IFRS and has a December 31 year end. Champion uses the straight-line method to depreciate all its buildings.
Required:
Prepare journal entries to record each of the following:
In: Finance
Cansela Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2018 with inventory of 6,100 units of its only product. The beginning inventory balance of $87,200 consisted of the following layers: 2,600 units at $12 per unit = $ 31,200 3,500 units at $16 per unit = 56,000 Beginning inventory $ 87,200 During the three years 2018–2020, the cost of inventory remained constant at $18 per unit. Unit purchases and sales during these years were as follows: Purchases Sales 2018 19,000 20,000 2019 25,000 27,500 2020 21,000 22,000 Required: 1. Calculate cost of goods sold for 2018, 2019, and 2020. 2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for each of the three years. 3. Determine the effects of LIFO liquidation on cost of goods sold and net income for 2018, 2019, and 2020. Cansela’s effective income tax rate is 30%.
In: Accounting
On 5/17/2020, a random sample of 1007 U.S. households finds that Trump has a 49% approval rating.
a) Use the 2SD method to find a 95% confidence interval estimate of the proportion of all U.S. households that approve of Trump on 5/17/2020. Show all work/steps to get the 2SD estimate. Round the margin of error to three decimal places. Work and Answer:
b) Use your answer from part (a) to fill in the red spaces below in order to write the results of the poll in these two notations:
According to the poll, on 5/17/2020, Trump has an approval rating of 49% ± _________%
According to the poll, on 5/17/2020, Trump’s approval rating was between ______% and ______%
c) If we were to use this same sample information to find a 90% confidence interval estimate instead of a 95% confidence interval estimate, then would our new 90% confidence interval be wider, or would it be narrower than the 95% estimate? Work and Answer:
In: Advanced Math