1) When the market rate of interest was 12%, Patel Corporation issued $1,000,000
ID: 2497848 • Letter: 1
Question
1) When the market rate of interest was 12%, Patel Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was
a.
$ 321,970
b.
$1,000,000
c.
$ 943,494
d.
$621,524
2) When the market rate of interest was 11%, Shah Corporation issued $100,000, 8%, 10-year bonds that pay interest semiannually. Using the straight-line method, the amount of discount or premium to be amortized each interest period would be
a.
$4,000
b.
$896
c.
$17,926
d.
$1,793
3) Bri Cheese Products Co. purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized by Bri from the sale?
a.
$0
b.
$5,000
c.
$2,500
d.
$10,000
4) Bri Cheese Products Co. purchases 10,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on Bri’s total stockholders' equity?
a.
increase, $100,000
b.
increase, $250,000
c.
decrease, $100,000
d.
decrease, $250,000
a.
$ 321,970
b.
$1,000,000
c.
$ 943,494
d.
$621,524
Explanation / Answer
As per Chegg Guidelines we answer one question per post. I have answered more than 1 question. Kindly post remaining questions in separate post to get the best answers 1) c.$ 943,494 Statemnet showing Price or Intrinsic Value Particulars Time PVf @12% Amount PV Cash Flows (Interest) 1.00 0.8929 110,000.00 98,214.29 Cash Flows (Interest) 2.00 0.7972 110,000.00 87,691.33 Cash Flows (Interest) 3.00 0.7118 110,000.00 78,295.83 Cash Flows (Interest) 4.00 0.6355 110,000.00 69,906.99 Cash Flows (Interest) 5.00 0.5674 110,000.00 62,416.95 Cash Flows (Interest) 6.00 0.5066 110,000.00 55,729.42 Cash Flows (Interest) 7.00 0.4523 110,000.00 49,758.41 Cash Flows (Interest) 8.00 0.4039 110,000.00 44,427.16 Cash Flows (Interest) 9.00 0.3606 110,000.00 39,667.10 Cash Flows (Interest) 10.00 0.3220 110,000.00 35,417.06 Cash flows (Maturity Amount) 10.00 0.3220 1,000,000.00 321,973.24 Selling Price of Bonds 943,497.77 Q4 d.decrease, $250,000 Journal Entries Particulars Dr Amt Cr Amt Treasury Stock Dr 250,000.00 To Cash 250,000.00 (10,000*25)
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