Morgan Company issues 10%, 20-year bonds with a par value of $790,000 that pay interest semiannually. The current market rate is 9%. The amount paid to the bondholders for each semiannual interest payment is:
A. $79,000.
B. $39,500.
C. $71,100.
D. $395,000.
E. $35,550.
Answer: B
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Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 4,500 units. Itis estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in the currentyear and 70% in the next year. In the current year's income statement, Hall should show warranty expense of
a. $45,000 b. $13,500 c. $31,500 d. $0
Use the information below for Alpha Inc for 2015 and 2016 to answer the following question. Equipment, December 31, 2015 $65,000 Equipment, December 31, 2016 72,000 Accumulated depreciation, December 31, 2015 39,000 Accumulated depreciation, December 31, 2016 30,000 During 2016, Alpha Inc sold equipment with a cost of $30,000 and accumulated depreciation of $25,000 . A gain of $3,000 was
recognized on the sale of the equipment This was the only equipment sale during the year. What amount would be reported as the cash proceeds from the sale of equipment? a. $2,000 b. $3,000 c. $5,000 d. $8,000
Which of the following research and development costs should always be capitalized?
A) costs of intangibles purchased from others B) costs of materials, equipment, and intangibles with alternative future uses purchased from others C) costs of equipment with an expected life greater than three years D) costs of contract services purchased from others
A common measure of profitability is the
a. asset turnover. b. debt to equity ratio. c. current ratio. d. receivable turnover.