47. Company has $1,000,000 debt outstanding at Libor rate + 1% as interest rate in year 1. Total interest expese was $60,000 in year 1. There was no change of interest rate in year 1. At Jan. 1st company paid $100,000 principal debt. At March 31. year 2, LIBOR rate was increased by 0.25% and at Jun 30 year 2, LIBOR rate was decreased by 0.50%. What was the total interest expense in year 2? a. $43,437.50 b. $49,375.00 c. $53,437.50 d. $59,375.00

47. Company has $1,000,000 debt outstanding at Libor rate + 1% as interest rate in year 1. Total interest expese was $60,000 in year 1. There was no change of interest rate in year 1. At Jan. 1st company paid $100,000 principal debt. At March 31. year 2, LIBOR rate was increased by 0.25% and at Jun 30 year 2, LIBOR rate was decreased by 0.50%. What was the total interest expense in year 2? a. $43,437.50 b. $49,375.00 c. $53,437.50 d. $59,375.00

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Balance sheet and income statement data indicate the following: Bonds payable, 6% (due in 15 years) $1,327,705 Income before income tax for year 443,320 Income tax for year 132,996 Interest payable 33,000 Interest receivable 19,000 Interest expense 79,662 Based on the data presented above, what is the times interest earned ratio? (Round to two decimal places.) Oa. 2.90 Ob. 6.57 Oc. 3.90 Od. 5.56
On January 1, 2012 Zesto Company received $1,032,880 for $1,000,000 face amount, 12% bonds, a price that yields 10%. Interest is payable semi-annually every June 30 and December 31. Interest expense for the year ended December 31, 2012 is a.$123,946 b.$120,000 c.$103,288 d.$102,870
On June 1, $40,000 of bonds were purchased between interest dates. The brokerage commission was $600. The bonds pay interest at 12%, which is paid semiannually on January 1 and July 1. How much interest revenue will be recorded on July 1? Oa. $2,000 Ob. $2,400 Oc. $406 Od. $400
5. CCC Plc paid interests on shareholder Peter's current account for 9 months at the rate of 15% with a principal of 50 000 000 CFAF. The central bank rate for the period stood at 11.5%. Required: Determine the deductible interest and the amount of the interest to be reinstated.
A debt of $13,000 with interest at 5% compounded semi-annually is repaid by payments of $1,850 made at the end of every 3 months. Construct an amortization schedule showing the total paid and the total cost of the debt. Complete the amorization schedule. (Round to the nearest cent as needed.) Outstanding Principal Balance $13,000 Payment Number Amount Paid Interest Paid Principal Repaid 1 $1,850 2 $1,850 3 $1,850 $ $ 4 $1,850 $ 5 $1,850 $4 6 $1.850 $ 7 $1,850 $ $ 8 $0 The total paid is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) The total interest is S
Accounting A company purchases corporate bonds for $1,000,000 and categorizes them as AFS. At year-end, their market value is $750,000. $100,000 of the decline in value is attributed to a rise in market interest rates, and $150,000 of the decline is attributed to credit losses. Prepare the year-end adjusting entry in either a T-account or spreadsheet format. See above for location of spreadsheet template. A company invests in stock of other companies for trading purposes. Its accounting year ends December 31. Its investment activity during 2019, 2020, and 2021 is as follows: a. Purchased stock of Acme Company in 2019 for $250,000 for the purpose of taking advantage of short-term volatility in the market place. b. Sold the investment shortly after purchase for $235,000. c. Purchased stock of Beeber Company in 2019 for $300,000. d. The investment had a fair value of $275,000 at the end of 2019. e. It was sold for $310,000 in late 2020. f. Purchased stock of Cromwell Company in 2019 for…
Rolstone Corp issued $200,000, 8% debenture, 5 Yr bonds on Jan. 1, Interest payment dates are Jan 1 and July 1. The bonds are sold for 217,062 on Jan 1. Market rate is 6%. Prepare journal entries for the following. a. Sale on Jan 1 b. July1 entry Jan 1 entry. Yr 2 c. Oct 1 entry Yr 1 - End of Fiscal Year July 1 entry. Yr 2. Please answer compelete
Oak Branch Inc. issued $900,000 of 5%, 10-year bonds when the market rate was 4%. They received $973,595. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. Round intermediate and final answers to whole dollar amount. Jan. 1, Year 1 June 30, Year 1 Dec. 31, Year 1 June 30, Year 2 Dec. 31, Year 2 June 30, Year 3 Dec. 31, Year 3 Cash Interest Payment ✔ 22,500 22,500 ✓ 22,500 ✔ 22,500 ✔ 22,500 ✓ 22,500 ✓ Interest on Carrying Value 19,472 19,411 V ✓ 19,350 ✔ 19,287 ✔ 19,222 ✔ 19,157 ✔ Amortization of Premium 3,028 3,089 3,150 ✔ ✓ 3,213 3,278 ✓ 3,343 ✔ Carrying Value 973,595 970,567 967,478 ✔ 964,328 ✔ 961,114 X 957,837 ✔ 954,493 X
14. Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company accountant is presented below. How much interest will Gingerbread Corp record in interest expense over a period of 6 years?
Balance sheet and income statement data indicate the following: Bonds payable, 11% (due in 15 years) $1,140,000 Income before income tax for year 410,000 Income tax for year 123,000 Interest payable 33,000 Interest receivable 19,000 Assuming bond interest is the only interest expense and there is no bond premium or discount, what is the times interest earned ratio? (Round to two decimal places.) Oa. 3.27 Ob. 1.29 O c. 4.27 O d. 2.29
(J) Hambelton Ltd. issued $4,550,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required:1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) 3.Prepare journal entries to record the issuance of the bonds, payment of…
On July 1, 2XX1, the company purchased P 1,000,000 8% bonds due on July 1, 2X11. The company plans to hold the bonds until maturity. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for P 875,000 to yield 10%. 2XX1 interest income should OP 50,000 O P 43,750 O P 35,000 O P 40,000

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