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1) When the market rate of interest was 12%, Patel Corporation issued $1,000,000

ID: 2497848 • Letter: 1

Question

1) When the market rate of interest was 12%, Patel Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was

a.

$ 321,970

b.

$1,000,000

c.

$ 943,494

d.

$621,524

2) When the market rate of interest was 11%, Shah Corporation issued $100,000, 8%, 10-year bonds that pay interest semiannually. Using the straight-line method, the amount of discount or premium to be amortized each interest period would be

a.

$4,000

b.

$896

c.

$17,926

d.

$1,793

3) Bri Cheese Products Co. purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized by Bri from the sale?

a.

$0

b.

$5,000

c.

$2,500

d.

$10,000

4) Bri Cheese Products Co. purchases 10,000 shares of its own $10 par common stock for $25 per share, recording it at cost. What will be the effect on Bri’s total stockholders' equity?

a.

increase, $100,000

b.

increase, $250,000

c.

decrease, $100,000

d.

decrease, $250,000

a.

$ 321,970

b.

$1,000,000

c.

$ 943,494

d.

$621,524

Explanation / Answer

As per Chegg Guidelines we answer one question per post. I have answered more than 1 question. Kindly post remaining questions in separate post to get the best answers 1) c.$ 943,494 Statemnet showing Price or Intrinsic Value Particulars Time PVf @12% Amount PV Cash Flows (Interest)                     1.00                0.8929                 110,000.00                     98,214.29 Cash Flows (Interest)                     2.00                0.7972                 110,000.00                     87,691.33 Cash Flows (Interest)                     3.00                0.7118                 110,000.00                     78,295.83 Cash Flows (Interest)                     4.00                0.6355                 110,000.00                     69,906.99 Cash Flows (Interest)                     5.00                0.5674                 110,000.00                     62,416.95 Cash Flows (Interest)                     6.00                0.5066                 110,000.00                     55,729.42 Cash Flows (Interest)                     7.00                0.4523                 110,000.00                     49,758.41 Cash Flows (Interest)                     8.00                0.4039                 110,000.00                     44,427.16 Cash Flows (Interest)                     9.00                0.3606                 110,000.00                     39,667.10 Cash Flows (Interest)                  10.00                0.3220                 110,000.00                     35,417.06 Cash flows (Maturity Amount)                  10.00                0.3220              1,000,000.00                  321,973.24 Selling Price of Bonds                  943,497.77 Q4 d.decrease, $250,000 Journal Entries Particulars Dr Amt Cr Amt Treasury Stock Dr        250,000.00 To Cash        250,000.00 (10,000*25)