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On July 1 2013, Tan Corporation acquired as a long term investment $ 360 million 6% XYZ Bonds dated July 1. 2013. Tan's management has the positive intent and ability to hold the bonds until maturity. The market rate for bonds of similar risk and maturity was 8%. Tan paid $ 300 million for the bonds. Tan will receive interest semiannually on June 30 and December 31. The effective interest rate is being applied throughout.
Problem 1) Prepare the journal entry to record issue of the bonds on July 1 ,2103 by XYZ
Problem 2) Prepare the journal entry to record XYZ payment t of interest on December 31,2013
Problem 3) Prepare the journal entry to record XYZ payment of interest on June 30 ,2014
Problem 4) What will XYZ report in its June 30 ,2014 Balance Sheet (FS item and amount)
Problem 5) What amount will be shown in its June 30 2014 Income Statement -for the period-Q2 FS item and amount
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.
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Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.
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