ABC Company purchased 100 Meissner AG 5%, 10-year, €1,000 bonds on January 1, 2022, for €100,000. The bonds pay interest annually on January 1. ABC's business model is to hold these bonds to collect contractual cash flows and sell. The market value of the bonds was €110,000 at the end of 2022. On January 1, 2023, after receipt of interest, ABC Company sold 40 of the bonds for €44,000. INSTRUCTIONS a. Prepare the journal entries to record the purchase of the bonds on January 1, 2022. b. Prepare the adjusting entry for the accrual of interest and the changes in bond value on December 31, 2022. (You can skip the closing entry.) c. Show the statement of financial position presentation from asset through equity section regarding the bond investments on December 31, 2022. d. Prepare the journal entry to record the receipt of interest, sale of the bonds, and reclassification adjustment on January 1, 2023. (You can skip the closing entry.)
Answers
a. Journal entries to record the purchase of the bonds on January 1, 2022:
Date: January 1, 2022
1. Purchase of bonds:
Debit: Bonds (Investment in Meissner AG Bonds) - €100,000
Credit: Cash - €100,000
b. Adjusting entry for the accrual of interest and changes in bond value on December 31, 2022:
Date: December 31, 2022
2. Accrual of interest income:
Debit: Interest Receivable - €5,000
Credit: Interest Income - €5,000
3. Adjustment for change in bond value:
Debit: Unrealized Gain on Bonds (Income) - €10,000
Credit: Fair Value Adjustment (Bonds) - €10,000
c. Statement of Financial Position presentation on December 31, 2022:
Assets:
- Bonds (Investment in Meissner AG Bonds) - €110,000 (Carrying value)
Liabilities:
- None, as the bonds are not a liability of ABC Company.
Equity:
- Unrealized Gain on Bonds (Income) - €10,000 (Reflecting the change in bond value)
d. Journal entry to record the receipt of interest, sale of bonds, and reclassification adjustment on January 1, 2023:
Date: January 1, 2023
4. Receipt of interest income:
Debit: Cash - €5,000
Credit: Interest Receivable - €5,000
5. Sale of 40 bonds:
Debit: Cash - €44,000
Debit: Fair Value Adjustment (Bonds) - €4,000 (40 bonds x €10,000 fair value adjustment per bond)
Debit: Unrealized Gain on Bonds (Income) - €4,000 (Gain on the sale of bonds)
Credit: Bonds (Investment in Meissner AG Bonds) - €48,000 (40 bonds x €1,000 cost per bond)
6. Reclassification adjustment:
Debit: Fair Value Adjustment (Bonds) - €6,000 (Remaining fair value adjustment)
Credit: Unrealized Gain on Bonds (Income) - €6,000 (To reverse the remaining unrealized gain)
These journal entries reflect the purchase, interest accrual, changes in bond value, receipt of interest, sale of bonds, and reclassification adjustment related to the bond investments for ABC Company.
To know more about bonds click here:
https://brainly.com/question/31388849
#SPJ11
Related Questions
Gibraltar Investment Advisers opened for business last week. Because of the clients brought over from previous affiliations of their IARs, they have started with $94 million under management for various individual and corporate clients. They also signed a contract to manage an additional $10 million for a wealthy individual. Gibraltar will begin managing that individual's portfolio at the beginning of the next calendar quarter. Which of the following best describes Gibraltar's investment adviser registration requirements?
A) Gibraltar would be eligible to register at the federal level.
B) Gibraltar need not register as an investment adviser because it will manage funds for an institutional investor.
C) Gibraltar's only option is to register at the state level because it currently manages less than $100 million in client funds.
D) Gibraltar must register with the state(s) and then, within 90 days of the receipt of the additional $10 million, must register with the SEC.
Answers
Answer:
A) Gibraltar would be eligible to register at the federal level.
Explanation:
In the case when an investment adviser would anticipates having at minimum $100 million under the managment within 120 days so it is eligible for becoming a federal covered advisor by registered with the SEC. ALso Gibraltar would have AUM in excess of $100 millon by the starting of the next quarter. In the case when AUM does not reach til $110 million so SEC would not be so important.
Therefore the option a is correct
Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result,
a. Skippy’s demand for peanut butter decreases as he considers buying almond butter.
b. Skippy’s demand for peanut butter will increase, but not until the end of the year.
c. Skippy’s demand for peanut butter shifts left today.
d. Skippy’s demand for peanut butter increases today.
Answers
Answer:
d. Skippy’s demand for peanut butter increases today.
Explanation:
The taste and preferences of the consumers are one of the factors affecting the demand for the goods. The demand for goods increases according to tastes and preferences. Another factor of an increase in demand is the expectation of a consumer regarding the future prices of the goods.
In the given scenario, Skippy's demand for the peanut butter will increase because of the above mentioned two reasons. Since he is very much fond of the peanut butter, the demand will remain constant. At the same time, after reading about the future unavailability of the peanut butter and the increase in the price of it, the demand for the peanut butter will rise the present day.
PLEASE HELP QUICKLY: (FIRST ANSWER GETS BRAINLIEST) PERSONAL & FAMILY FINANCE
What is the main reason companies offer free or promotional items and services?
to get rid of bad products
to lure in new customers willing to spend money
to reveal their new products to their competition
Answers
Answer:
lure in customers; so the middle option
Answer:
to lure customers
Explanation:
outline 2 advantages to H&H of using secondary market research
Answers
Explanation:
It provides quick information and factual background perspectives
It is less expensive and affordable
In the nation of Wiknam, the money supply is $80,000 and reserves are $18,000. Assuming that people hold only deposits and no currency, and that banks hold no excess reserves, then the reserve requirement is
Answers
In the nation of Wiknam, when the money supply is $80,000 and reserves are $18,000, then the Required reserve ratio is 22.5%.
What is money supply?The money supply is the term that is used in the macroeconomics. It refers to the total amount of currency held by the public at any given time.
There are a variety of methods to define “money,” but the most common indicators are currency in circulation and demand deposits. People hold no currency and bank holds no excess reserve.
Computation of Required reserve ratio:
According to the given information,
Money Supply = $80,000
Reserves = $18,000
Firstly, apply the formula of money supply:
\(\text{Money Supply}= \text{Money Multiplier} \times \text{Reserve}\\\\ \text{Money Multiplier}= \dfrac{\text{Money Supply}}{\text{Reserve}}\\\\\text{Money Multiplier}= \dfrac{\$80,000}{\$18,000}\\\\\text{Money Multiplier}=4.44\)
Now, as we know that:
\(\text{Money Multiplier} = \dfrac{1}{\text{Required Reserve Ratio}}\\\\\text{Required Reserve Ratio} = \frac{1}{\text{Money Multiplier}}\\\\\text{Required Reserve Ratio} =\dfrac{1}{4.44}\\\\\text{Required Reserve Ratio}= 0.225\\\\\text{Required Reserve Ratio}= 0.225 \times 100\\\\\text{Required Reserve Ratio} = 22.5\%\)
Therefore, required reserve ratio is 22.5%.
Learn more about the money multiplier, refer to:
https://brainly.com/question/14986591
#SPJ1
___ should not be included on the resume
references
white space
hobbies
or All the Above
Answers
Answer:hobbies
Explanation:
8. If the price of a good changes from £5 to £4 and demand change from 100 to 120 units, the PED
will be...
(1 Point)
-0.25
-1.0
-0.2
-2.0
Answers
Answer:
Explanation:
dvsf
discuss how the central bank uses the open market operations as a sutible measure of credit control. Explain with respect to both inflation and deflation
Answers
Answer: By affecting the money in circulation
Explanation:
The central bank uses the open market operations as a sutible measure of credit control by affecting the quantity of money in circulation. It's the central bank that prints money that's being used, to avoid economical unbalance, the central bank has to regulate how the money is circulated in the country. They do this by either selling or buying government securities through open market operations. During this process the purchase government securities from commercial banks and institutions making bank assets free and more cash for loans.
Select the examples that best demonstrate likely tasks for Business Financial Management and Accounting workers.
Check all that apply
Horace documents information about a company's spending on a computer
Sun creates a budget to show how money will be used
Noel creates goals and policies for a company and presents them at a meeting
Jermaine researches a company's potential customers and ways to sell to them.
Selina helps employees and management to negotiate and come to agreement.
Aubrey checks documents and reports to make sure they are accurate and complete
Answers
Answer:
A.) Horace documents information about a company’s spending on a computer.
B.) Sun creates a budget to show how money will be used.
F.) Aubrey checks documents and reports to make sure they are accurate and complete.
Explanation:
I did the assignment
Answer:
A.) Horace documents information about a company’s spending on a computer.
B.) Sun creates a budget to show how money will be used.
F.) Aubrey checks documents and reports to make sure they are accurate and complete.
Explanation:
took it on edge 2020 and got it right
Match the academic requirements with the careers.
-training -Ph.D. -bachelor’s degree
-anthropologist
-telecommunications technician
-network administrator
Answers
The academic requirements as well as the training required has been grouped below:
anthropologist: Ph.Dtelecommunications technician: trainingnetwork administrator: bachelor’s degreeWhat is a work requirement?This is the term that has to do with the job requirement that is needed for specific disciplines. That is the amount of training and the level of training that is required to be experts in the careers that have been chosen by the specialists.
Hence we can say that The academic requirements as well as the training required has been grouped below:
anthropologist: Ph.Dtelecommunications technician: trainingnetwork administrator: bachelor’s degreeRead more on job requirement here: https://brainly.com/question/6747675
#SPJ1
What is the primary purpose of a bank reconciliation?.
Answers
Bank reconciliations is important internal control tool for preventing and detecting fraud.
What is bank reconciliation?Bank reconciliation seems to be a process that explains why there are differences between a company's bank statement and its Cash Book. The process is used not only to identify differences, but also to make changes to relevant accounting records in order to keep the records up to date.The three methods of a bank reconciliation are as follows: Statement comparison. Balancing the books. The reconciliation is being recorded.Account Reconciliation Types Account reconciliations come in a variety of forms and can be used for either personal or professional purposes. Account reconciliation is classified into five types: bank reconciliation, vendor reconciliation, business-specific reconciliation, intercompany reconciliation, and customer reconciliation.To learn more about bank reconciliation refer to:
https://brainly.com/question/15525383
#SPJ4
Give four future of labour
Answers
MARK "BRIANLIEST!"
1. Government. Government holds much sway over the free markets. ...
2. International Transactions. The flow of funds between countries effects the strength of a country's economy and its currency.
3. Speculation and Expectation.
4. Supply and Demand.
MARK "BRIANLIEST!"
a service provided by -e-government that requires access to the Internet is _____.
A. RFID tags
B. E-tax returns
C. Radio programming
D. CCTV (Closed circuit TV)
Answers
Answer:
B. E-tax returns
Explanation:
E-tax returns is the electronic filing of tax returns via the internet. It entails online submission of pre-approved tax return forms available on the tax authority's website.
In recent years, governments have put measures to facilitate e-returns. It has simplified the process making it popular among taxpayers. Electronic tax filing has have contributed to having a high number of citizens registering as taxpayers.
Although it may seem straightforward, the management process is complex. The management functions include:
Answers
Although it may seem straightforward, the management process is complex. The management functions include: applying and distributing organizational resources effectively.
What are management functions?This is a term that is used to refer to the work that is done by the people that are at the management level in an organization.
Most of these functions have to do with the fact that the resources in the business are well distributed.
Read more on management functions here:
https://brainly.com/question/13653810
#SPJ1
nike owns equipment that cost $98,300 with accumulated depreciation of $67,200. nike asks $36,200 for the equipment but sells the equipment for $33,800. compute the amount of gain or loss on the sale.
Answers
There is a $2800 gain on the sale if Nike sells the equipment for $33,800.
Salvage value can be described as the estimated value of an asset after depreciation. It can be calculated by subtracting the accumulated depreciation from the initial cost. In this case, Nike owned the equipment that cost $98,300 with accumulated depreciation of $67,200, therefore the salvage value can be calculated as follows;
salvage value = $98,300 - $67,200 = $31,000
Now the amount of gain or loss on the sale can be calculated by subtracting the salvage value from the selling price of the equipment which in this case is $33,800, therefore;
amount of gain or loss = $33,800 - $31,000
amount of gain or loss = $2800
Therefore the amount computed on the sale is a gain of $2800.
To learn more about salvage value; click here:
https://brainly.com/question/28344861
#SPJ4
Formulate and answer a True/False question for each of the following topics:
a. Integer Optimization – Binary Constraint Types
b. Integer Optimization – Fixed Charge Model and Excel Solving
c. Project Scheduling – Impact of shortening an activity
d. Project Scheduling – Impact of delaying an activity
Answers
a. In Integer Optimization, binary constraint types restrict variables to only take on values of 0 or 1. True.
b. The Fixed Charge Model is a type of Integer Optimization problem and can be solved in Excel using the Solver add-in.
True.
c. False. Shortening an activity in a project schedule may not always result in a reduction of the project duration if the shortened activity is not on the critical path.
d. True. Delaying an activity in a project schedule will always result in an increase in the project duration, as it will push back the start and end dates of subsequent activities.
Learn more about Fixed Charge Model
https://brainly.com/question/6073365
#SPJ4
kristie, a college sophomore, wants to master effective time-management techniques for studying. according to experts, which technique would be most effective? a. highlighting passages in a book, rather than writing notes in the margin b. waiting to study the night before major exam c. studying for 50 minutes, then breaking for 10 minutes d. reading assigned materials after the lecture so unimportant materials can be skipped e. rotating classroom note-taking responsibilities with fellow students
Answers
According to experts, the most effective time-management technique for studying is studying for 50 minutes, then taking a 10-minute break (option c). This technique, known as the Pomodoro Technique, helps maintain focus and productivity while preventing burnout.
Studying for 50 minutes and then taking a 10-minute break is a popular technique because it aligns with the natural rhythms of the brain and helps maintain focus. It allows students to dedicate focused attention to their studies for a specific period, and the short breaks provide a chance to rest and recharge before resuming studying. This method prevents fatigue and helps improve concentration and retention.
Highlighting passages in a book (option a) can be helpful to some extent but may not be as effective as actively engaging with the material by taking notes or summarizing key points. Waiting to study the night before a major exam (option b) is generally considered ineffective as it limits the time available for proper comprehension and retention of the material.
Reading assigned materials after the lecture (option d) may be useful for review, but it may not provide sufficient time for deeper understanding. Lastly, while rotating note-taking responsibilities with fellow students (option e) can be beneficial for collaborative learning, it may not directly address time-management techniques for individual studying.
know more about time-management :brainly.com/question/33700012
#SPJ11
An American organic potato-chip company has decided to consider global expansion. It has done its market research and found that there is a comparable market for its products. In addition, it has found the required distributors and a potential manufacturing location overseas. However, in the United States, its chips have regional themes, such as Saucy Southern Barbeque and Spicy Southwest Chili flavors, which will not easily translate into markets outside the United States. How could the company address this issue while maintaining the identifiable elements of the brand when expanding globally?
Answers
There are various strategies for addressing this issue regardless of which one you eventually adopt, you must change any of the elements of the marketing mix; two possible strategies are listed below.
How to illustrate the information?Product customization:
Changing the recipe for potato chips with the most similar flavors in the new region where the potato is distributed. It is difficult to predict how the chip flavor will be replicated in the global market, so looking for identifiable flavors per region while maintaining the brand's colors, advertising, price, and quality keeps the brand's identity untouchable even as the final product expands its lines.
Making changes to the promotion:
If changing recipes is too difficult for the product team, advertising campaigns will create a brand identity for different regions. For this, the packaging languages may change, and the methods of promotion in each region (TV, internet, influencers) may be considered to introduce the product in each region.
Alternatively, you could consider keeping the brand original and launching a strong pull marketing campaign to position the product as an International product.
Learn more about product on:
https://brainly.com/question/13692912
#SPJ1
Employee turnover percentage is an example of which performance measure category? 00 Multiple Choice Internal business processes. customer, financial learning and growth
Answers
Employee turnover percentage is an example of a measure within the internal business process category.
What is Employee?An employee is a person who is hired to work for an organization or business in exchange for pay and other benefits. They typically have a contract of employment, outlining the terms and conditions of their employment. Employees have a range of duties and responsibilities which vary depending on the type of job they have and the company they are employed by. Some common tasks they may be expected to complete include customer service, sales, administrative work, and other related roles. Employees also have rights, such as the right to a safe and healthy working environment, fair pay, and other benefits that may be outlined in their contract.
This performance measure looks at the rate at which employees are leaving the organization, providing insight into how well the organization is managing its workforce. Other performance measures that fall into this category include productivity, customer satisfaction, and quality.
To learn more about Employee
https://brainly.com/question/27404382
#SPJ1
Deimos Corporation has 500,000 shares of $2 par-value common stock issued and outstanding when the market price per share is $22 per share. By what amount will total equity increase when the company declares a 2:1 stock split
Answers
Answer:
Total equity will remain the same
Explanation:
A stock split is simply increasing the number of shares and at the same time reducing the par value per share.
A stock split of 2:1 means that the number of shares would double while par value reduces by half.Specifically,the number of shares would increase from 500,000 to 1,000,000 while the par value reduces from $2 per share 1/2*$2 i.e $1 each.
All in all,the there is no increase in total equity overall.
Should I start my final exam? im kinda scared ill get a bad grade lol. anyways, I hope everyone is doing great.
Answers
Answer:
do it lol putting more words because its requireddddd
Answer:Yes you should and dont be scared just try your hardest. Also i am doing great what about you ?
Explanation:
Which of the following is true about crime? Group of answer choices When crime occurs in the context of business, no one is "really" injured. Crime undermines the expectations that we all have about living in a civil society. When an insurance company has to pay for a claim arising from a crime, the victim and society at large are injured, but not the insurance company. If the victims of embezzlement do not immediately notice the embezzlement, then they must not "need" the money anyhow, so no real crime has been committed. There are many crimes that are victimless.
Answers
Answer:
Crime undermines the expectations that we all have about living in a civil society.
Explanation:
please help me ASAP
i will give brainliest
Answers
Answer:
d
Explanation:
The equation of any straight line, called a linear equation, can be written as: y = mx + b, where m is the slope of the line and b is the y-intercept. The y-intercept of this line is the value of y at the point where the line crosses the y axis.
in a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others. group of answer choices true false
Answers
True, in a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others.
A franchise is a business model in which a company (the franchisor) allows another individual or entity (the franchisee) to use its trademarks, products, and business processes to start and operate a business. One of the main benefits of the franchise model is that it allows individuals to start a business with a lower capital requirement than would be required if they were starting a business from scratch. This is because the franchisor has already invested in developing and refining the business model, marketing strategies, and brand recognition, which can help reduce the costs associated with establishing a new business.
Learn more about marketing here:
https://brainly.com/question/13414268
#SPJ1
the fee charged by a stockbroker to make a purchase of stock on a customer's behalf is a
Answers
The fee charged by a stockbroker to make a purchase of stock on a customer's behalf is a brokerage commission representing the compensation for facilitating the transaction and providing related services
The fee charged by a stockbroker to make a purchase of stock on a customer's behalf is commonly known as a brokerage commission or brokerage fee.
This fee represents the compensation that the stockbroker earns for facilitating the transaction and providing the necessary services to execute the purchase order.
The brokerage commission is typically calculated as a percentage of the total value of the transaction or as a fixed fee per share.
The specific rate or fee structure can vary depending on the brokerage firm, the type of trade, the size of the order, and other factors. It is important for investors to be aware of these fees as they can impact the overall cost and return on investment.
The brokerage commission covers various services provided by the stockbroker, including order execution, trade settlement, custodial services, research and analysis, access to trading platforms, and customer support.
The fee compensates the broker for their expertise, market access, and infrastructure required to execute trades on behalf of their clients.
For more question on stockbroker visit:
https://brainly.com/question/28269762
#SPJ8
which of the following statements regarding fringe benefits is false? multiple choice the general rule is that an employee fringe benefit is taxable unless the benefit is specifically excluded from the employee's gross income. employers are not allowed to deduct the cost of nontaxable employee fringe benefits. nontaxable fringe benefits must be provided to employees on a nondiscriminatory basis. none of these choices are false.
Answers
The statements regarding fringe benefits is false is none of these choices are false.(option e)
In contrast, certain fringe benefits are excluded from the employee's gross income, such as health insurance premiums, employer contributions to retirement plans, and educational assistance up to a certain limit.
Employers must provide nontaxable fringe benefits to employees on a nondiscriminatory basis, meaning that they cannot favor certain employees over others when providing these benefits.
In conclusion, fringe benefits can be a valuable perk for employees, but they come with tax implications and rules that must be followed.
Hence the correct option is (e).
To know more about fringe here
https://brainly.com/question/12732324
#SPJ4
Which of the following might vary in on online purchase depending on where the purchaser lives?
A. The quality of the object
B. The sales tax charged
C. The appearance of the item
D. The retail price of the item
Answers
Answer:
The sales tax
Explanation:
A demand loan for $6691.33 with interest at 7.2% compounded quarterly is repaid after 6 years, 4 months. What is the amount of interest paid?
The amount of interest is $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)
Answers
A demand loan for $6691.33 with interest at 7.2% compounded quarterly is repaid after 6 years, 4 months. The amount of interest paid is $3,746.12.
To calculate the amount of interest paid, we can use the formula for compound interest: A = P(1 + r/n)^(nt)
Where:
A = the final amount (loan + interest)
P = the principal amount (loan)
r = interest rate per period
n = number of compounding periods per year
t = number of years
Given:
Principal amount (P) = $6691.33
Interest rate (r) = 7.2% = 0.072 (expressed as a decimal)
Number of compounding periods per year (n) = 4 (quarterly compounding)
Number of years (t) = 6 years + 4 months = 6.33 years
Substituting these values into the formula, we can calculate the final amount (A):A = $6691.33(1 + 0.072/4)^(4*6.33)
A ≈ $10,437.45
To find the amount of interest paid, we subtract the principal amount from the final amount:
Interest = A - P = $10,437.45 - $6691.33 = $3,746.12
Therefore, the amount of interest paid is $3,746.12.
To learn more about, interest, click here, https://brainly.com/question/30393144
#SPJ11
Assume that the next morning, the bond credit rating changes to A-/A-, and the new yield to maturity becomes 8.2%. What is the price of the bond after this change?
[From the prior problem: Calculate the price of the following corporate bond with a credit rating of BBB+ / Baa+: $1000 par value, 8% semi-annual pay coupon, 8.40% yield to maturity, and 5 years to maturity.}
Answers
If the bond credit rating changes to A-/A-, and the new yield to maturity becomes 8.2%, then the price of the bond will be $635.21.
To calculate the price of the bond after the credit rating change, we'll use the updated yield to maturity of 8.2%. The bond details remain the same:
Par value (PV) = $1000
Coupon rate (C) = 8% (semi-annual)
Yield to maturity (YTM) = 8.2% (semi-annual)
Years to maturity (n) = 5 (semi-annual)
To calculate the price of the bond, we can use the present value of the bond's cash flows:
Price = (C / 2) * [1 - (1 / (1 + YTM/2)ⁿ] + PV / (1 + YTM/2)ⁿ
Let's calculate the price of the bond after the credit rating change:
Price = (40 / 2) * [1 - (1 / (1 + 0.082/2)¹⁰)] + 1000 / (1 + 0.082/2)¹⁰
Price = 20 * [1 - (1 / (1.041)¹⁰)] + 1000 / (1.041)¹⁰
Price = 20 * (1 - 0.598799) + 1000 / 1.593848
Price = 20 * 0.401201 + 627.19
Price = 8.02402 + 627.19
Price = $635.21402
Therefore, after the credit rating change, the price of the bond would be approximately $635.21.
To know more about credit rating, visit https://brainly.com/question/29481760
#SPJ11
. bob has $2,500 invested in a bank that pays 5% annually. how long will it take for his funds to double?
Answers
Bob has $2,500 invested in a bank that pays 6% annually. How long will it take for his funds to double:
It will take 11.90 years for the funds to doubleHere we want to calculate the time it will take for the invested amount to be doubled.
Mathematically:
t = ln(future value/ Present value)/ln(1 + rate)
From the question:
Future value = 2 * invested amount = 2 * 2500 = $5,000
Present value = $2,500
Rate = 6% = 6/100 = 0.06
Substituting these values:
t = ln(5000/2000)/ln (1 + 0.06)
t = ln2/ln1.06
t = 11.90 years
Learn more about one example in the united states here brainly.com/question/14172753
#SPJ4