BUSINESS COLLEGE

Tanner-UNF Corporation acquired as a long-term investment $330 million of 5.0% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Tanner-UNF paid $300.0 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, 2021, was $310.0 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet? 4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2022, for $290.0 million. Prepare the journal entry to record the sale.

Answers

Answer 1

Answer:

Answer and Explanation:

The Journal entries are shown below:-

1. Investment in bond Dr, $330 million

To Cash $300 million

To Discount on bond investment $30 million

(Being investment in bond is recorded)

2. Cash Dr, $8.25 million ($330 million × 5% × 6 ÷ 12)

Discount on bond investment Dr, $0.75 million

To Interest revenue $9 million ($300 million × 6% × 6 ÷ 12)

(Being recognition of bond interest and discount is recorded)

3. The computation of investment is shown below:-

Investment = $300 million + $0.75 million

= $300.75 million

4. The journal entry is shown below:-

Cash Dr, $290 million

Discount on bond inventment Dr, $29.25 million

Loss on sale of investment Dr, $10.75 million

To inventment in bond $330 million

(Being sale of investment is recorded)

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During January, Dream House Builders, Inc. incurred $550 of actual indirect materials costs, as supported by materials requisitions. Required:
Draw the journal entry.

Answers

Answer and Explanation:

The journal entry is given below:

Factory overhead Dr $550

To Raw material inventory $550

(being the actual indirect material cost is recorded)

Here the factory overhead is debited as it increased the expense while the raw material inventory is credited as it decreased the assets

Final answer:

The journal entry for Dream House Builders, Inc., incurring $550 of indirect materials costs would be a debit to the Manufacturing Overhead account and a credit to the Materials Inventory account, reflecting the expenditure.

Explanation:

The subject of this question is related to accounting and journal entries concerning indirect materials costs. When Dream House Builders, Inc. incurs $550 of actual indirect materials costs, the journal entry would record this as a debit to manufacturing overhead and a credit to the materials inventory.

For instance, assuming the indirect materials used are reducing the inventory, the journal entry would look like this:

Manufacturing Overhead Debit $550
Materials Inventory Credit $550

This signifies that the indirect materials costs are absorbed into manufacturing overhead (an expense account) from the inventory (an asset account), adhering to double-entry bookkeeping.

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Using the expectations hypothesis theory for the term structure of interest rates, determine the expected return for securities with maturities of two, three, and four years based on the following data. (Input your answers as a percent rounded to 2 decimal places.) Interest Rate 1-year T-bill at beginning of year 1 4 % 1-year T-bill at beginning of year 2 5 % 1-year T-bill at beginning of year 3 9 % 1-year T-bill at beginning of year 4 11 %

Answers

Answer:

The expected return for securities with maturities of two, three, and four years is as follows:

Expected Return 2 year Security=4.50 %

Expected Return 3 year security=6 %

Expected Return 4 year security=7.25 %

Explanation:

According to the expectations hypothesis theory, the expected return for the 2 year security is the average of the expected yields of two one-year T-bills, for the 3 year security is the average of the expected yields of three one-year T-bills and the 4 year security is the average of the expected yields of the four one-year T-bills.

Therefore, in order to calcuate the expected return for each year we have to use the following formula:

Expected Return 2 year Security=(4 + 5) / 2 = 4.50 %

Expected Return 3 year security=(4 + 5 + 9) / 3 = 6 %

Expected Return 4 year security=(4 + 5 +9 + 11) / 4 = 7.25 %

The income statement for the Clothing Division of Tom Ron Surf Company is as follows: Sales $445,000 Operating expenses 270,000 Net operating income 175,000 Interest expense 35,000 Earnings before taxes 140,000 Income tax expense (30%) 42,000 Net income $ 98,000 How much is net operating profit after taxes

Answers

Answer:

78000

Explanation:

Enterprise zones are: A. government-owned properties that are available for entrepreneurial ventures at a reduced cost.B. similar to incubator facilities but strictly run by city and state governments.C. blighted areas that contain toxic materials making them unsuitable for business operations.D. specific locations across the U.S. where entrepreneurs can set up shop and receive tax breaks for operating in these areas.

Answers

Answer: Option D

Explanation: Enterprise zones are established by the government with the objective of development and economic growth in the local neighborhood.

The investors are attracted to make their business centers or production units in such areas by giving them incentives such as tax exemptions or other such benefits.

These are made usually in under developed areas. In countries like China and India, these areas are called special economic zones.

Professor Wellman is constructing a demographic questionnaire for use in aresearch project. One question asks students to report whether they are currentlyliving in an "urban," "suburban," or "rural" setting. This is an example of a/an:A. nominal scale.B. ordinal scale.C. ratio scale.D. interval scale.

Answers

Answer:

B. ordinal scale

Explanation:

The ordinal scale the scale of the measurement that uses the labels and classified them into an arranged orders and implying that the class must be put into such as order were one class is considered to be greater than other class.and this label exists on a four levels of measurement. as the ranking of the urban and suburban and the rural areas.

What kind of display is located near the cash registers to encourage impulse
buying?

Answers

To encourage impulse purchases, inexpensive items such as snacks and lighters are placed near the cash registers.

What is the cash register?

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It is typically attached to a storage space and applied to store cash and other valuables. In order to encourage impulse purchases, inexpensive items such as snacks and lighters are strategically placed near cash registers.

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Answer:

cheap things like snacks and lighters

Explanation:

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