15. MC.13-088 Breed Cerperaticn issues 10,000 shares of s50 par preterred s for
ID: 2550317 • Letter: 1
Question
15. MC.13-088 Breed Cerperaticn issues 10,000 shares of s50 par preterred s for cash an s5 ser share The entry sa recore tse trammaction wll consist of a debt to Casy for 750,00 and a crolt ar creets a Preterveo stock c. Prefemed Stock for s505,000 and Retane Carnings for $250,000 d. Preferred Stock for $75o,p0o 16 MC 13-093 ALGOAIgonthmic dex for the issuance of 117 c6l shares of cammon stock Assume that 10,4s0 whar is the amount ot cash disidends to be shares wene originaly ssued and 3,313 werw subseQuendy reacouired paid a $2-per-share dhidend s dedared? 5117,068 .33,313 538.460 d.$70,29 17. TE 14-011 the market rate of interest i 89% and a corporation's bands bear interast at 7%, the bonds win ,et at premium. 18. TE. 14-022 1% feur-year, sio0 000 bond is $12,928, the se nan al straigh ir Ehe amount or a bond pr mum on an issued Ine amortization of the premiurm is s1.46 19. TE. 14-027 If bonds are sold for a discount, the carrying value of the bonds is equal to the face value less the unamortized discount True False 20. MC.14-070 ALGO(Algorithmic) r $628,000 of g% bonds are issued at 98, the amount of cash received from the sale is a. $684,520Explanation / Answer
15) A) preferred stock for $500,000 (10,000 shares*$50 per share) and paid-in capital in excess of par - preferred stock for $250,000 (10,000 shares*$25 per share)
17) False, because here market interest rate is higher than coupon rate, which means bonds sell at discount.
18) Semi annual straight line amortization of the premium = Bond premium / No of semi annum
= Bond premium / (4 years *2)
= $12,928 / 8 semi annum
= $1,616.
But the given semi annual straight line amortization of the premium is $1,416. hence, the given statement is false.
19) True
20) Cash received from the sale = $628,000 * 0.98
= $615,440
Note: I have tried to a lot, but 16th question is not clear. So i couldn't answer for that question. Kindly write and then post that question again.
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