Mills Corporation acquired as a long-term investment $260 million of 5% bonds, dated July 1, on July 1, 2018. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 3% for bonds of similar risk and maturity. Mills paid $300 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $280 million.

Required:
1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. At what amount will Mills report its investment in the December 31, 2018, balance sheet?
4. Suppose Moody’s bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2019, for $315 million. Prepare the journal entries to record the sale.

Chapter 13: Financing the Deal and (LBO's). This takeover structure is used but not limited by private equity firms when taking over a company using heavy leverage along with some equity. This excessive leverage can magnify financial returns and also increase risks. Assets are usually acquired and used as collateral for the extensive loans that are taken out. RJR Nabisco was one the largest LBOS’ in history. This is an Important topic in Mergers!Provide your thoughts about the LBO’s method of financing deals. Are they successful and why do they create value, downside risks, costs, tax Issues, deal structures and many other examples along with an advantages along with a risk. In order to give everyone a chance, don’t answer all of these, which are just some examples where you can take any ONE item (or provide another) about LBO’s to discuss. This can also include an example of a company currently undergoing or has undergone an LBO in the real world. Also, Write 300-350 words

ABC has spend 1.8 million in developing a new software for its payment system for the period of 1 Jan 2015-31 Dec 2016. The company is able to demonstrate that from 1 July 2016 the production process met the criteria for recognition as an intangible asset. The financial year end is 31 Dec. During 2016, the total training cost to improve the employees skill were 300,000£. A focus group of other retail banking providers was invied to a conference of the introduction of the new software in 2016. Cost of the conference was 100,000£. In 2016, ABC acquired another rival company XYZ for a total sum of 200 million. At this date a brand valuation expert valued XYZ brand at 40 million on the basis of useful life of 20 years. Other net assets were deemed to have a fairu value of 125£ million. Explain, how the costs given above should be treated in the financial statement of ABC for the year ending 31 Dec 2016 in relation to intangible assets per IAS38.

Mills Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July 1, 2018. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $350 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $325 million.

Required:
1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. At what amount will Mills report its investment in the December 31, 2018, balance sheet?
4. Suppose Moody’s bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2019, for $360 million. Prepare the journal entries to record the sale.

Laker Company resported the following January Purchases and sales datat for its only product

Required
The company uses a perpetual inventory system. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs and inventory amount to cents.) For specific identification, ending inventory consist of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.

Required information

[The following information applies to the questions displayed below.]
  
Laker Company reported the following January purchases and sales data for its only product.
  

Required:
The Company uses a periodic inventory system. For specific identification, ending inventory consists of 305 units, where 275 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

Mills Corporation acquired as a long-term investment $260 million of 5% bonds, dated July 1, on July 1, 2018. Company management has positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 3% for bonds of similar risk and maturity. Mills paid $300.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $280.0 million.

Required:
1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. At what amount will Mills report its investment in the December 31, 2018, balance sheet?
4. Suppose Moody’s bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2019, for $315 million. Prepare the journal entry to record the sale.

Suppose that real interest rates decrease across Europe. This development will (Increase/Decrease) U.S. net capital outflow at all U.S. real interest rates, which in turn will cause the (Demand for/Supply of) loanable funds to (Increase/Decrease) because net capital outflow is a component of the relevant curve in the loanable funds market.

The Global Marketplace

How do governments attempt to control foreign businesses operating within their borders? When U.S. companies do business in other countries, what issues do they face? Describe the responsibilities and ethical concerns that you feel are important for U.S. companies to consider when doing business in other countries.

In a survey of 1000 U.S. adults, 700 think police officers should be required to wear body cameras while on duty.

a. Construct a 90% confidence interval for the proportion of all U.S. adults that think police officers should be required to wear body cameras while on duty.

b. Interpret your confidence interval.