Park corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. the bonds mature in 10 years and pay interest semiannually every june 30 and december 31. all of the bonds were sold on january 1 of this year. park uses the effective-interest amortization method and also uses a premium account. assume an annual market rate of interest of 8.5 percent. (fv of $1, pv of $1, fva of $1, and pva of $1) (use the appropriate factor(s) from the tables provided.) required: 1. prepare the journal entry to record the issuance of the bonds
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Ответ:
Cash 2,214,007 debit
bonds payable 2,000,000 credit
premium on B.P 214,007 credit
Explanation:
To know the proceeds for the bonds we will calculate the present value of the coupon payment and the present vlaue of the maturity at market rate:
The coupon payment will be an ordnary annuity
Coupon payment: 2,000,000 x 0.05 = 100,000
time: 10 years x 2 payment per year = 20
rate8.5% annual rate: 0.085/2 = 0.0425 semiannual rate
PV$1,329,436.5808
Whilethe maturity the present value of a lump sum
Maturity 2,000,000.00
time 10 years to maturity
rate 0.085
PV 884,570.83
PV coupon payment$1,329,436.5808
PV maturity $884,570.8301
Total$2,214,007.4109
facevalue 2,000,000
premium 214,007
Ответ:
Galla should charge $47
Explanation:
Data provided in the question:
Desired markup = 25% of the total cost
Units to be sold = 5,000
Variable product cost per unit = $15
Variable administrative cost per unit = 10
Total fixed overhead = $45,000
Total fixed administrative = $18,000
Now,
Total variable cost
= Variable product cost per unit × Number of units to be sold
= $15 × 5,000
= $75,000
Total variable administrative cost
= Variable administrative cost per unit × Number of units to be sold
= $10 × 5,000
= $50,000
Therefore,
Total cost
= Total variable cost + Total variable administrative cost + Total fixed overhead + Total fixed administrative
= $75,000 + $50,000 + $45,000 + $18,000
= $188,000
Thus,
Price per unit = Total cost ÷ Number of units to be sold
= $188,000 ÷ 5,000
= $37.6
Price after markup = Price per unit + 25% of price per unit
= $37.6 + ( 0.25 × $37.6 )
= $37.6 + $9.4
= $47
Hence,
Galla should charge $47