On January 1, 2020, Empress Bank granted a loan to a borrower. The interest on the loan is 10% payable annually starting on December 31, 2019. The loan matures in three years on December 31, 2022. Principal amount 5,000,000 Direct origination cost incurred 457,500 Origination fee charged against the borrower 200,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 8%.

Determine the carrying amount of the loan on January 1, 2020.

Prepare journal entries for January 1, 2020.

Prepare journal entry for receipt of interest on December 31, 2020.

Prepare journal entry for amortization of direct origination cost in 2021.

Prepare journal entry for receipt of payment of loan in 2022.

Back in May 2020, an ethanol plant’s risk manager looked at futures prices and considered a hedge to lock in a price on part of her new-crop corn acquisition planned for mid-to-late October 2020. She saw that the December 2020 futures contract was trading at $3.20/bushel and she knew that the basis in mid-October—when she expected to take delivery of the corn in question and to lift the hedge (i.e., to offset her futures position)—has typically (most years) been about 25 cents under December. What net price did she, back in May, expect to pay in October 2020 if she placed this hedge? d. $2.80/bu b. $2.95/bu c. $3.20/bu a. $3.45/bu e. None of the above

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- What was the nominal yield on this bond on October 15, 2020?  [To 1 decimal place.]

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- What was the current yield on this bond on October 15, 2020?  [To 2 decimal place.]

Make the following journal entries in good form.

1. On January 1, 2020, Entity A sold common stock for $30,000 to investors.

2. On January 3, 2020, Entity A performed services for Entity B for $1,500 on account.

3. On January 5, 2020, Entity A performed services for Entity C for $750 and Entity C paid.

4. On January 7, 2020, Entity A purchased a new computer (office equipment) from Best Buy for $500, paying $100 down, the rest on account.

5. On January 20, Entity B paid Entity A in full (see item 2).

6. On January 30, Entity A paid Best Buy for the computer (see item 4).

7. On January 31, Entity A received its utility bill for $150 and paid it.

please use word

QUESTION 5 (16 minutes; 9 marks):  

Queenstown Corporation issues 4,000, $4 cumulativepreferred shares at $80 each and 12,000 common shares at $18 at the beginning of 2020. Each preferred share is convertible into four common shares. During the years 2020 and 2021, the following transactions affected Queenstown Corporation’s shareholders’ equity accounts:

2020

Dec. 10      Declared and paid $12,000 of annual dividends to preferred shareholders.

2021

Dec. 10      Declared and paid the annual dividend to preferred shareholders and a $4,000 dividend to common shareholders.

Dec. 21      The preferred shares were converted into common shares.

Required:

a)         Journalize each of the 2020 and 2021 transactions.

b)         After the preferred shares are converted, what is the total number of common shares issued?

On January 1, 2020, Sunland Manufacturers had 342,000 common shares outstanding. On April 1, the corporation issued 34,200 new common shares to raise additional capital. On July 1, the corporation declared and distributed a 10% stock dividend on its common shares. On November 1, the corporation repurchased on the market 9,900 of its own outstanding common shares to make them available for issuances related to its key executives’ outstanding stock options.

a) Calculate the weighted average number of shares outstanding as at December 31, 2020

b) Assume that Sunland Manufacturers had a 1-for-10 reverse stock split instead of a 10% stock dividend on July 1, 2020. Calculate the weighted average number of shares outstanding as at December 31, 2020.

Sheridan Corp. has a deferred tax asset account with a balance of $74,440 at the end of 2019 due to a single cumulative temporary difference of $372,200. At the end of 2020, this same temporary difference has increased to a cumulative amount of $450,400. Taxable income for 2020 is $757,900. The tax rate is 20% for all years. At the end of 2019, Sheridan Corp. had a valuation account related to its deferred tax asset of $44,800.

(a) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that the deferred tax asset will be realized in full.

(b) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that none of the deferred tax asset will be realized.

Below is the cost information for June and July, 2020.

The production manager informs you that the Beginning Work in Progress  (July 1) was 90% complete as to direct materials and 75% complete as to conversion costs. He also estimates that the Ending Work in Progress  (July 31) is 50% complete as to materials and 35% complete as to conversion costs.

Use the Five-Step Process for assigning costs. Spartans Inc uses the weighted average method for assigning costs. Clearly label and explain each step. Show all calculations.

1. What is the nominal GDP in 2019?

2. What is the nominal GDP in 2020?

3. Assuming 2019 is the base year, calculate the price index for 2020. ROUNDING UP TO TWO DECIMAL POINTS. For Example, 2.136986 is rounded up to 2.14.

4. What is the real GDP in 2020?

5. What is the real rate of growth of GDP from 2019 to 2020?

6.  Assuming the marginal propensity to consume (MPC) is 0.60 and the equilibrium GDP (Ye) is $5,000, calculate government multiplier. following: