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What two alternative methods are available to account for the issuance of convertible debt? What method did GAAP finally require? Why?
Assume that GoldenEye Company issues its bonds on March 1 at par, plus accrued interest.
Prepare the journal entries to record the issuance on April 1 and the first interest payment on October 1.
Prepare calculations to prove that the selling price of the bonds is $285,880.07.
On June 1, LeMond Company recalls bonds with a face value of $200,000 and a current book value of $190,000.
All the bonds are converted into common stock when the market value of Nolan Corporation's common stock is $50 per share.
How would you define the optimal capital structure? Is it possible to achieve the optimal structure in a business?
Would you consider the real estate market an efficient capital market? Please explain why or why not.
Does the company have enough capitalization? Which month does the company achieve positive cash flow?
Define gain contingency. Describe the accounting requirements for a gain contingency
How does a company demonstrate the ability to refinance currently maturing short-term debt?
The effective income tax rate is 35% and the bonus rate is 12%. Calculate Borat's bonuses and income taxes for the current year.
The face value of the note includes the price of the machinery and interest. The note is to be paid in four $6,000 quarterly installments.
Prepare journal entries to record the liability for compensated absences for the first quarter of 2010. Assume no sick leave had been taken by the employees.
Raymond Moss, vice president of Moss Auto Parts, gets an annual bonus of 15% of net income after bonus and income taxes.
On July 31, 2010, Lurch declared and paid a $2.50 per share cash dividend to its shareholders.
What is the amount of Cressman's research and development expenses for 2010 if it uses U.S. GAAP?
Identify something you want to change in the company and identify and explain the impact of the change.
A stock has an initial price of $100 per share, paid a dividend of $2.00 per share during the year, and had an ending share price of $125.
Which of the preceding expenditures does the company capitalize? How does it depreciate or amortize each?
How might the decision be influenced if the company were interested in earnings management?
The controller argues that the $15,000 should be expensed because if the building is sold or returned to the city, it cannot recover the $15,000.
Explain why the valuation of assets acquired by a corporation in exchange for its own common stock is sometimes difficult.
Compute the rate of return earned by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods.