QUESTION 1) Manilow Company issued $600,000, 9%, 20-year bonds on January 1, 2006, at 103. Interest is payable semiannually on July 1 and January 1. Manilow uses straight-line amortization for bond premium or discount.InstructionsPrepare the journal entries to record the following.(a) The issuance of the bonds.(b) The payment of interest and the premium amortization on […]
QUESTION John is watching an old game show rerun on television called Lets Make a Deal in which the contestant chooses a prize behind one of two curtains. Behind one of the curtains is a gag prize worth $150, and behind the other is a round-the-world trip worth $7,200. The game show has placed a […]
QUESTION In 1991, Barbara purchased a single life annuity for $250,000 that would pay her $25,000 per year for life beginning in 2002. Barbaras life expectancy from 2002 forward on which the payments were based is 25 years.a. How much would Barbara include in income if she is still receiving payments in 2020?b. If Barbara […]
QUESTION How is compound interest computed? What is a future value? What is a present value? To calculate the value of a sum of money at a future date, compounding technique is used. Using compounding, FV = PV*(1 r)^t; where, FV is the Future Value, PV is the Present Value, r is the interest rate […]
QUESTION Gary Kornig will be 30 years old next year and wants to retire when he is 65. So far he has saved (1) $6,950 in an IRA account in which his money is earning 8.3 percent annually (2) $5,000 in a money market account in which he is earning 5.25 percent annuallyGary wants to […]
QUESTION Explain how the future value of an ordinary annuity interest table is converted to the future value of an annuity due interest table. Annuity is a stream of cash flows at equal intervals. Cash flows could be either receipts (as in case of interest on investments) or payments (as in case of loan payments). […]
QUESTION Ed Summers expects to invest $10,000 for 25 years, after which he wants to receive $108,347. What rate of interest must Summers earn? (Use Table B.2.) ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION Cyclone Rentals borrowed $15,550 from a bank for three years. If the quoted rate (APR) is 6.75 percent, and the compounding is daily, what is the effective annual interest rate (EAR)? 365*3) A = $ 19040 Interest = A Borrowed amount = $ 19040 15550 = $3490 ANSWER: CLICK REQUEST FOR […]
QUESTION Clean Corporation manufactures and sells dishwashers. Clean provides all customers with a two-year warranty guaranteeing to repair, free of charge, any defects reported during this time period. During the year, it sold 100,000 dishwashers for $325 each. Analysis of past warranty records indicates that 12% of all sales will be returned for repair within […]
QUESTION Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually.Instructions(a) If Bogut plans to establish the AB Foundation once the fund grows to $1,999,000, how many years until he can establish the foundation?(b) Instead of investing the entire $1,000,000, […]
