19 The interest rate that investors demand to earn for loaning their A) yield to
ID: 2342219 • Letter: 1
Question
19 The interest rate that investors demand to earn for loaning their A) yield to maturity t) coupon rate C) differential rate D) market interest rate On December 31, 2018, Clark Sales has 10-year Bonds Payable of $89,000 and Discount on Bonds Payable ol How will this be shown on the December 31, 2018 Balance Sheet? 20. A) Bonds Payable $89,000 less Discount on Bonds Payable $2,350 for a carrying amount of B) Bonds Payable $89,000 plus Discount on Bonds Payable for a carrying amount of $91,3o C) Bonds Payable $89,000 D) Bonds Payable $89,000 less one-tenth of $2.350 for a carrying amount of $88.765 21. Authorized shares represent the A) number B) number of shares that the corporation has sold C) number of shares that are currently held by stockholders D) maximum number of shares of stock that a company can legally issue of previously issued shares that have been repurchased by the corporation. 22. Preferred stockholders A) receive a dividend preference over common stockholders B) are guaranteed that they will not have a loss on their investment C) generally have voting rights D) have more investment risk compared to common stockholders 23. The par value of stock is A) the current selling price of stock B) the highest price for which a share can sell C) the amount assigned by a company to a share of its stock D) the price paid if the corporation purchases its own stock back N Paarland, Inc has9,000 shares of preferred stock outstanding. The preferred stock has a S90 par value, a 14% dividend rate, and is noncumulative, if Pearland has sufficient funds to pay dividends, what is the total amount of dividends that will be paid out to preferred stockholders? A) $32 143 B) $113,400 C)$57.857 D) $8.100Explanation / Answer
Answer
The correct answer is Option ‘D’ Market Interest rate is the interest rate that investors demand to earn for loaning their money.
This is because had they invested that money elsewhere in the market, they would have earned interest at market interest rate.
The correct answer is Option ‘A’ Bonds Payable $ 89,000 LESS Discount on Bonds Payable $ 2,350 for a carrying amount of $ 86,650
At year end, Bonds Payable are shown at their face value less any amount of unamortised Discount on Bonds Payable. In case of Premium, it is added to the face value of Bond.
Correct answer is Option ‘D’ Authorised shares represents the maximum no. of shares of stock that a company can legally issue.
The correct answer is Option ‘A’ Preference stockholders receives a dividend preference over common stockholders.
The correct answer is Option ‘C’ The par value of stock is the amount assigned by a company to a share of its stock.
Total preference dividend payable = 9000 shares x $ 90 par value x 14% = $ 113,400
Correct answer is Option ‘B’ $ 113,400
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