Mills Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July 1, 2018. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $350 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $325 million.
Required:
1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. At what amount will Mills report its investment in the December 31, 2018, balance sheet?
4. Suppose Moody’s bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2019, for $360 million. Prepare the journal entries to record the sale.

Answers

Answer 1

Answer:Please see explanation for answers

Explanation:

1. Journal to record the investment in bonds

Date              Account title and explanation     Debit                     Credit

July, 1 2018     Investment in Bonds         $300,000,000  

  To Premium on Bond Investment           $50,000,000  

  To Cash                                                                                 $350,000,000

2. To record interest on Bonds

Date              Account title and explanation     Debit                  Credit

December 31,2018  Cash                                   $9,000,000

         (300,000,000 x 6% x 6/12)

 Interest Revenue

($350,000,000 ×  4% x 6/12)                                                   $7,000,000

 To Premium on bonds                                                             $2,000,000

3. The Amount to be reported in balance sheet is

 Investment in Bonds                                                                $300,000,000

+Premium on bonds  

(Original Premium $50,000,000  -Amortization (2,000,000) =48,000,000

Amount to be reported in Balance sheet=  $348,000,000

4. Date              Account title and explanation     Debit                  Credit  

January 2, 2019     Cash                                 $360,000,000

     To gain on sale                                                                       $12,00,000      ($348,000,000 - $360,000,000)

       To Investment in bonds                                                       $300,000,000    

       To Premium on bonds                                                          $48,000,000


Related Questions

A synchronous decrease in energy prices and an increase in government spending will result in:
A) increases in output and a decrease in the price level in the long run.
B) Increase in short run aggregate supply and in aggregate demand
C) Increase in long run aggregate supply and a rightward shift in aggregate demand
D) A leftward shift in short run aggregated supply
E) Decrease aggregate demand and increase short run aggregate supply​

Answers

Answer:

B) Increase in short run aggregate supply and in aggregate demand

Explanation:

In the case when there is a rise in  the government spending  so it would be increases aggregate demand. As AD curve shifts to the rightward, that rise the level of the price and increase in GDP.

On the other hand, if there is a decreasing in energy prices so it decreased the production cost, which rise aggregate supply. As AS curve shifts rightward, due to this it decrease the price level and increase the GDP.

So, The net impact is a definite increase in GDP, but the impact on price level is non-certain. As price level of the short run is non-certain, so we are not able to predict long run impacts.

A synchronous decrease in energy prices and an increase in government spending will result in "increases in output and a decrease in the price level in the long run". The correct option is A.

A synchronous decrease in energy prices reduces production costs for businesses which is leading to an increase in short-run aggregate supply.

At the same time, an increase in government spending stimulates economic activity and boosts aggregate demand. As a result, both short-run aggregate supply and aggregate demand increase.

In the short run, this combination of factors can lead to an expansion in output and potentially a decrease in the price level due to the downward pressure on production costs.

Therefore, the correct option is A.

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Matthew is the CEO of an international company. He oversees business operations in eleven countries across the globe. Which information system will he use to make strategic decisions about his company as per the four-level pyramid model?
A.
decision support system
B.
executive information system
C.
transaction processing system
D.
office support system
E.
management information system

Answers

Answer:

D. Executive Information System

Which type of market
buys goods and
services to produce
public services or to
transfer them to others
who need them?
a.
retail
b.
consumer
C.
government
d.
wholesaler​

Answers

government i think correct me if im rwong l

A group of young patrons come into the venue after a sports event. They are loud and excited, celebrating a win for their team. Some of the patrons seem as though they have already been drinking, and the other patrons in the venue have noticed this group. A) How do you respond to these patrons? Issue the group with a warning to make sure they know the type of behaviour that the venue expects. B) One of the patrons comes to the bar to order a few jugs of pre-mix alcoholic drinks for the group. Refuse service to the patron and explain why serving alcohol in this manner is irresponsible. C) The patron is not happy that you have refused him service and he pressures you to serve the group the jugs of alcohol. More of the patron’s friends come over to the bar and start to make a scene, talking loudly for the rest of the venue to hear. D) How do you respond to this? E) After you ask some of the patrons to leave the venue, others from the group start to get upset. They are getting more aggressive and you do not think you can handle the situation on your own. How do you respond to this?

Answers

Answer:

The following is how I would deal with the issue of drinking and other associated issues among the Patron in the venue.

A) How do you respond to these patrons?

O.  Issue the group with a warning to make sure they know the type of behaviour that the venue expects.

B) One of the patrons comes to the bar to order a few jugs of pre-mix alcoholic drinks for the group. Refuse service to the patron and explain why serving alcohol in this manner is irresponsible.

O. I would refuse to serve the group with the mix which they wanted because they are already drunk going by their behaviour. This would also help to prevent total intoxication in the group which would end up endangering the road users should they decide to go home by driving. The best option would be to ensure that, they took taxi back to their various homes rather than driving themselves.

C) The patron is not happy that you have refused him service and he pressures you to serve the group the jugs of alcohol. More of the patron’s friends ........D) How do you respond to this?

O. By subtle reminder to them that, they are becoming a public nuisance in the venue, and would end up calling the police should the continue with their acts.

E) After you ask some of the patrons to leave the venue, others from the group start to get upset. They are getting more aggressive and you do not think you can handle the situation on your own. How do you respond to this?

O. By informing my overall supervisor why at same time putting a call across to the police about the potential breakdown of order in the venue which has a very high chance of leading to fight or injury.

Explanation:

Units-of-activity Depreciation A truck acquired at a cost of $160,000 has an estimated residual value of $10,350, has an estimated useful life of 41,000 miles, and was driven 3,300 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $fill in the blank 1 (b) The depreciation rate $fill in the blank 2 per mile (c) The units-of-activity depreciation for the year $fill in the blank 3

Answers

Answer:

Cost of Truck = $160,000

Residual Value = $10,350

Useful Life = 41,000 miles

a. Depreciable Cost = Cost of Truck / Residual Value

Depreciable Cost = $160,000 - $10,350

Depreciable Cost = $149,650

b. Depreciation Rate = Depreciable Cost / Useful Life

Depreciation Rate = $149,650 / 41,000

Depreciation Rate = $3.65 per mile

c. Number of miles driven during the year = 3,300

Depreciation for the Year = Depreciation Rate * Number of miles driven during the year

Depreciation for the Year = $3.65 per mile * 3,300

Depreciation for the Year = $12,045

what is human resource managment

Answers

Explanation:

Human resource management, or HRM, is defined as the process of managing employees in a company and it can involve hiring, firing, training and motivating employees.

An example of human resource management is the way in which a company hires new employees and trains those new workers.

noun

27

3

Answer:Human aid management is the strategic approach to the powerful management of people in a agency or corporation such that they assist their business gain a competitive benefit. it's far designed to maximise employee overall performance in provider of an corporation's strategic targets.

Explanation:

Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 715,000 shares of stock outstanding. Under Plan II, there would be 465,000 shares of stock outstanding and $6.75 million in debt outstanding. The interest rate on the debt is 7 percent, and there are no taxes.
a. Assume that EBIT is $1.6 million. Compute the EPS for both Plan I and Plan II.
b. Assume that EBIT is $3.1 million. Compute the EPS for both Plan I and Plan II.
c. What is the break-even EBIT?

Answers

Answer:

EPS = (Net income - Dividends) / Average number of share

a. Plan 1

Number of share = 715,000

EPS = $1,600,000/715,000

EPS = 2.23 (EBIT = Net Income as Interest and tax are 0)

Plan 2

Net income = EBIT = $1.6 million = $1,600,000

Interest = 0.07*$6,750,000 = $472,500

EBT = $1,600,000 - $472,500 = $1,127,500

Tax = 0

Net Income = 1,127,500 (1)

Number of share = 465,000

EPS = $1,127,500/465000

EPS = 2.42 (Net Income from 1)

b. Plan 1

EPS = $3,100,000/715000 = $4.33

Plan 2

When EBIT = $3,100,000

Interest = 0.07*$6,750,000 = $472,500

Net Income = $3,100,000 - $472,500 = $2,627,500

EPS = $2,627,500/465,000

EPS = 5.65 (From 2)

c. Plan 1 EBIT = Plan 2 EBIT to calculate break-even EBIT

EBIT/715,000 = (EBIT - 0.07*$6,750,000)/465,000

EBIT = $1,351,350

Given the following information: Percent of capital structure: Preferred stock 10 % Common equity (retained earnings) 40 Debt 50 Additional information: Corporate tax rate 34 % Dividend, preferred $ 7.00 Dividend, expected common $ 2.50 Price, preferred $ 104.00 Growth rate 8 % Bond yield 9 % Flotation cost, preferred $ 9.40 Price, common $ 76.00 Calculate the weighted average cost of capital for Digital Processing Inc.

Answers

Answer: 8.23%

Explanation:

Firstly, we will calculate the cost of debt which will be:

= Yield (1-Tax rate)

= 9% × (1-0.34)

= 9% × 0.66

= 5.94%

Then, the Cmcost of preferred stock will be:

= 7/(104-9.40)

= 7/(94.6)

= 7.39%

We will also get the value of the cost of equity which will be:

= (Dividend expected common/Price common) + growth rate

= (2.50/76) + 8%

= 3.29% + 8%

= 11.29%

For Debt:

Cost after tax: 5.94

Weight = 50%

Weighted cost = 5.94 × 50% = 2.97

For Preferred stock:

Cost after tax: 7.39

Weight = 1%

Weighted cost = 7.39 × 10% = 0.74

For Common equity

Cost after tax: 11.29

Weight = 40%

Weighted cost = 11.29 × 40% = 4.52

Weighted average cost of capital = 2.97 + 0.74 + 4.52 = 8.23%

Production Budget and Direct Materials Purchases Budget
Jani Subramanian, owner of Jani's Flowers and Gifts, produces gift baskets for various special occasions. Each gift basket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scented soap) in a basket that is wrapped in colorful cellophane. Jani has estimated the following unit sales of the standard gift basket for the rest of the year and for January of next year.
September 250
October 200
November 230
December 380
January 100
Jani likes to have 10% of the next month's sales needs on hand at the end of each month. This requirement was met on August 31.
Two materials are needed for each fruit basket:
Fruit 1 pound
Small gifts 6 items
The materials inventory policy is to have 10% of the next month's fruit needs on hand and 30% of the next month's production needs of small gifts. (The relatively low inventory amount for fruit is designed to prevent spoilage.) Materials inventory on August 31 met this company policy.
Required:
1. Prepare a production budget for September, October, November, and December for gift baskets. (Note: Round all answers to the nearest whole unit.)
Jani's Flowers and Gifts
Production Budget for Gift Baskets
For September, October, November, and December
September October November December
Sales
Desired ending inventory
Needed
Less: Beginning inventory production
Total
2. Prepare a direct materials purchases budget for the two types of materials used in the production of gift baskets for the months of September, October, and November. (Note: Round answers to the nearest whole unit.)
Jani's Flowers and Gifts
Direct Materials Purchases Budget
For September, October, and November
Fruit: September October November
Production
Pounds of fruit
Required for production
Desired ending inventory
Total needs
Less: Beginning inventory
Pounds purchased
Small gifts:
Production
Items required
Needed for production
Desired inventory
Total needs
Less: Beginning inventory
Items purchased

Answers

Answer:

Jani's Flowers and Gifts

1. Jani's Flowers and Gifts

Production Budget for September, October, November, and December for Gift Baskets:

                                            Sept        Oct.       Nov.       Dec.

Estimated sales units          250       200        230       380

Estimated ending inventory 20          23          38          10

Units available for sale       270        223       268       390

Beginning inventory             25          20          23         38

Production required          245          213       245       352

2. Jani's Flowers and Gifts

Direct Materials Purchases Budget

For September, October, and November

                                            Sept        Oct.       Nov.

Fruit (1 pound):

Production requirement     245          213       245

Ending inventory:                  21            25         35

Total needs                        266          238      280

Beginning inventory:            25            21         25

Pounds purchased             241           217      255

Small Gifts (6 items each):

Production requirement   1,470        1,278     1,470

Ending inventory:                383          441        634

Total needs                       1,853        1,719     2,104

Beginning inventory:           441          383        441

Items Purchased               1,412        1,336     1,663

Explanation:

a) Data and Calculations:

                                            Sept        Oct.       Nov.       Dec.       Jan.

Estimated sales units          250       200        230       380        100

Estimated ending inventory 20          23          38          10

Units available for sale       270        223       268       390

Beginning inventory             25          20          23         38           10

Production required          245          213       245       352

Jani's Flowers and Gifts

Direct Materials Purchases Budget

For September, October, and November

                                            Sept        Oct.       Nov.       Dec.

Fruit 1 pound:

Production requirement     245          213       245         352

Ending inventory:                  21            25         35          106

Total needs                        266          238      280         458

Beginning inventory:            25            21         25           35

Pounds purchased             241           217      255         423

Small Gifts 6 items each:

Production requirement   1,470        1,278     1,470       2,112

Ending inventory:                383          441        634      1,899

Total needs                       1,853        1,719     2,104       4,011

Beginning inventory:           441          383        441         634

Items Purchased               1,412        1,336     1,663      3,377

Select the education and qualifications that are most helpful for Warehousing and Distribution Center Operations careers. Check all that apply.

high school degree
stamina
leadership
patience
concentration skills
associate degree
creativity

Answers

Answer:

High school degree

Stamina

Patience

Concentration skills

Explanation:

Just did it on edg.

The education and qualifications that are most helpful for Warehousing and Distribution Center Operations careers are:

High school degreeStaminaPatienceConcentration skillsWhat is Warehousing and Distribution Center Operation?

Distribution centers offer value-added services such product mixing, order fulfilment, cross-docking, kitting, and packing in addition to the primary function of storing items in warehouses. Distribution centers, in contrast to warehouses, also only keep the necessary quantity of goods for a shorter amount of time.

Because they primarily support B2B enterprises as a conduit between suppliers and customers, distribution centers are more customer-centric. Distribution centers are in charge of effectively meeting customer demands and expectations; warehouses are in charge of safely keeping products.

Operations at distribution centers are therefore more complicated than those at warehouses. Distribution centers use state-of-the-art technology for order processing, inventory management, warehouse management, and transportation management.

Define concentration.

"The ability to direct your thinking in any direction you choose and to hold it for as long as you choose" is the definition of concentration.

Concentration is the capacity to narrow the field of awareness to one particular idea or subject while rejecting all other distractions.

One of the most crucial skills anybody should have is the capacity to concentrate. However, the majority of people find it difficult to focus. They frequently can't focus on one thing for a reasonable amount of time since their attention tends to wander.

This is a problem that can be solved. The capacity for concentration can be improved, just like any other talent. A person who practices mental discipline may concentrate without being interrupted by thoughts, sounds, or anything else.

While you might occasionally appear to be reading or concentrating on your work, if your attention is diverted you probably won't be able to retain the information for long enough to use it properly to produce something intelligible.

If you find the subject matter to be "boring," you're too sleepy or hungry, you have too much on your plate, you lack motivation for a long-term or short-term goal, or you're very concerned or worried and easily distracted, your ability to focus may be affected.


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