On April 1 . 2014, Ziba Inc purchased as a temporary investment $100,000, face amount, 10% U.S. Treasury notes; they pay interest semiannually on January 1 and July 1 . The notes were purchased at 102 . Which of the following entries correctly records this purchase?
a. Trading Securities--10% U.S. Treasury Notes. 100,000
Interest Receivable......................... 2,500
Premium on Trading Securities............... 2,000
Cash..................................... 104,500
b. Trading Securities--10% U.S. Treasury Notes. 102,000
Interest Receivable......................... 2,500
Cash..................................... 104,500
c. Trading Securities--10% U.S. Treasury Notes. 100,000
Interest Receivable......................... 4,500
Cash..................................... 104,500
d. Trading Securities--10% U.S. Treasury Notes. 102,000
Cash..................................... 102,000
B
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Which of the following is the strategic objective of the defensive core strategy, protect position?
A) maintain profits B) improve competitive position C) maximize cash flow D) diversify growth E) grow in existing markets
Which of the following statements is CORRECT?
A. On an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss. B. On an expected yield basis, the expected current yield will always be positive because an investor would not purchase a bond that is not expected to pay any cash coupon interest. C. If a coupon bond is selling at par, its current yield equals its yield to maturity. D. The current yield on Bond A exceeds the current yield on Bond B; therefore, Bond A must have a higher yield to maturity than Bond B. E. If a bond is selling at a discount, the yield to call is a better measure of return than the yield to maturity.
Caverun Co has two classes of stock. The company may:
a. issue stock warrants, which are short-term options to buy shares. b. issue stock rights, which are long-term options to buy shares. c. not use stock options to make one class of stock more attractive than the other. d. use stock options and warrants, the form and content of which are determined by the board of directors, to supplement compensation plans for directors, officers, and employees. e. Both issue stock warrants, which are short-term options to buy shares and also issue stock rights, which are long-term options to buy shares.
The cost of debt is measured on an after-tax basis and reflects the rate that the firm would need to offer if it issued new debt today
Indicate whether the statement is true or false