An investor holds a 6% callable bond purchased at 105. If the issuer calls the bond before maturity, the yield to call (YTC) realized by the investor would be A) equal to the yield to maturity (YTM). B) less than the coupon. C) greater than the yield to maturity (YTM). D) greater the current yield (CY).

Answers

Answer 1

Answer: less than the coupon

Explanation:

When a bond that is bought at a premium of 205 is called before the bond matures by the issuer, this implies that the accelerated premium loss will have to be reflected in calculated yield to maturity.

It should also be noted that the YTC is the lowest among the yields for the premium bonds. Therefore, if the issuer calls the bond before maturity, the yield to call (YTC) realized by the investor would be less than the coupon.

Option B is correct.


Related Questions

When a business combination occurs, or a company obtains control over another, a special set of accounting principles known as the acquisition method applies. The acquisition method requires that the acquired net assets are recorded on the balance sheet at fair value, regardless of the amount paid by the acquirer.
a. True
b. False

Answers

Answer:

a. True

Explanation:

The Acquirer is deemed to have acquired the assets at Fair Value at the Acquisition date.

These assets are then included in the Consolidated Statements at their fair values at acquisition irregardless of the amount paid by the acquirer.

The difference in the amount paid by Acquirer and the Net Assets acquired can bring about Goodwill or a Gain from Bargain Purchase.

Memoryjet, Inc has developed a new technology for high-volume jump drives. In order to manufacture their new devices they will need to gear up a new production line, which will cost about $85 million. What kind of bond instrument could they use to help secure the funds they need for their new line

Answers

Answer: Corporate bond

Explanation:

From the question, we are informed that Memoryjet, Inc has developed a new technology for high-volume jump drives and that in order to manufacture their new devices they will need to gear up a new production line, which will cost about $85 million.

The kind of bond instrument could they use to help secure the funds they need for their new line is the corporate bond. This is used by an organization in order for them to raise capital.

The increase in Hollywood revenues outside North America reflects which business trend? Multiple Choice strategic alliance globalization cost reduction cultural distance local responsiveness

Answers

Answer:

globalization

Explanation:

Hollywood has become a global business for quite some time, being by far the most important and lucrative cinema business in the world.

Hollywood producers dominate the world markets with blockbusters that make billions of dollars every year.

Recently, the growth of the Chinese market has represented a huge new market for Hollywood producers.

The increase in Hollywood revenues outside North America reflects globalization.

What is globalization?

It is the process where the people and the products should be moved easily across the borders. It is an economic concept where the market should be integrated, also there should be trade and investment that contain few barriers so that the flow of the products could be less. Also, the Hollywood should be the global business that represent the lucrative cinema business.

Learn more about revenues here: https://brainly.com/question/24469067

When Nokia used a global campaign to promote their new product (Nokia 900 Communicator) that combined phone, fax, e-mail, and Internet functions with the slogan "Everything. Everywhere," they were appealing to a(n) ______________________ segment.

Answers

Answer:

Universal segment

Explanation:

Universal segment is a method used in marketing to target a broad range of customers. The aim is to attract a larger number of people to purchase the product.

segmentation is the way a product is tailored to meet the needs of target customers.

in the given scenario Nokia used a global campaign to promote their new product (Nokia 900 Communicator) that combined phone, fax, e-mail, and Internet functions. This has a broad range of users for these features.

The slogan of this product was also  "Everything. Everywhere".

Kansas Enterprises purchased equipment for $81,000 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $7,500 at the end of five years.
Using the straight-line method, depreciation expense for 2021 would be:_________.

Answers

Answer:

Depreciation expense for 2021 will be $14700

Explanation:

The straight line method charges a constant depreciation expense each period throughout the useful life of the asset. The depreciation expense per period under the straight line method is calculated as follows,

Depreciation expense = (Cost - Residual value) / Useful life of the asset

Depreciation expense = (81000 - 7500) / 5

Depreciation expense = $14700

A listing office typically gives 50% of the gross commission to the selling office and splits the remainder with 40% to the broker and 60% to the listing salesperson. Salesperson Andrew’s listing was sold by another office for $189,500. Assuming a 6% commission, Salesperson Andrew’s share would be:

Answers

Answer:

$3,411

Explanation:

The computation of the andrew share is shown below:

Sale value of another office is $189,500

6% commission is

= $189,500 ×6%

= $11,370

Now its 50% is

= $11,370 ÷2

= $5,685

And its 60% is

= $5,685 × 60%

= $3,411

First we find out 6% than 50% and then finally 60% so that the share of Andrew could come and the same is to be considered

The Clayton Act: Group of answer choices a. was declared illegal. b. closed loopholes in the Sherman Antitrust Act. c. prevents anticompetitive practices. d. prohibits all mergers and acquisitions.

Answers

Answer:

d. prohibits all mergers and acquisitions.

Explanation:

The Clayton Act is an antitrust law of the United States of America. It was enacted by the U.S Congress in the year, 1914. Henry De Lamar Clayton was the lawmaker who introduced this legislation which is aimed at regulating the behavior or activities of massive business entities, it was then signed into law by President Woodrow Wilson on the 15th of October, 1914.

The Clayton Act prohibits all mergers and acquisitions of a business entity if the reason is to monopolize and by extension lessen competition in the market according to its section 7. The Act was passed primarily to stop incipient anti competitive behavior that are not covered by the Sherman Act.

Other sections of the Clayton Act prohibited predatory pricing, price cutting and discrimination, monopoly etc.

1. An updated schedule is: a. A schedule that reflects new design modifications. b. A revised schedule reflecting project information at a given data date regarding completed activities, in-progress activities, and changes in future work. c. A schedule that incorporates subcontractors’ schedules. d. A schedule with resources and budget.

Answers

Answer: A revised schedule reflecting project information at a given data date regarding completed activities, in-progress activities, and changes in future work

Explanation:

An updated schedule is a schedule which has been carefully analysed and revised and hence reflects the information regarding a project at a given data date regarding the activities that have already been completed, the activities that are still in progress and the changes that will be made in the future work.

A homeowner from State A hired a contractor from State B to build a vacation home for her in State C. The parties signed the contract in State A. The contractor breached the contract, and the homeowner sued the contractor in a court of State A, seeking damages of $100,000. The contractor removed the case to the federal court for State A. The homeowner promptly moved to remand the case to state court, arguing that venue was improper.

Which of the following facts is most relevant to the court's decision on the homeowner's motion?

A The contract was signed in State A.

B The contractor resides in State B.

C The homeowner commenced the action in a State A court.

D The vacation home was to be built in State C.

Answers

Answer:

The Home owner commenced the action in a state A court ( C )

Explanation:

The Defendant ( the contractor)  can decide to transfer the case from a state court to a federal court within the same state in which the case was filled by the The home owner  if the federal court has the Jurisdiction to rule on the case

Since the contract was signed in state A under the laws of the state the case is definitely a state case and the Homeowner's move to remand the case to a state court with the argument that the Federal court lacks proper Jurisdiction is in order. The court decision on the matter will be based on the fact that the Homeowner commenced the action in a state A court where the contract was signed.

How is single loss expectancy (SLE) calculated?This task contains the radio buttons and checkboxes for options. The shortcut keys to perform this task are A to H and alt+1 to alt+9. A Annualized rate of occurrence * asset value * exposure factor B Threat + vulnerability C Asset value ($) * exposure factor D Annualized rate of occurrence * vulnerability

Answers

Answer: C.) Asset value ($) * exposure factor

Explanation: The Single Loss Expectancy is used to evaluate the loss in monetary terms that will be incurred by an organization as a result of risk on it's asset. It is expressed mathematically as :

SLE = AV * EF

Where AV refers to the value of the organization's asset.

EF, the exposure factor ranges from 0 - 1 and it measures the fractional percentage of the asset which will be lost due to risk on such asset.

It is an important aspect of risk management or assessment in an organization and steps must be taken to lower the exposure factor of assets.

​Assume that your firm is an importer of Mexican chairs denominated in pesos. Your competition is mainly U.S. producers of chairs. You wish to assess the relationship between the percentage change in the firm’s stock price (SPt) and the percentage change in the peso's value relative to the dollar (PESOt). SPt is the dependent variable. You apply the regression model to an earlier subperiod and a more recent subperiod. In the recent subperiod, you increased your importing volume. You should expect that the regression coefficient in the PESOt variable would be ____ in the first subperiod and ____ in the second subperiod.

Answers

Answer:

negative, negative.

Explanation:

So, let us fill in the gap in the question given above. Bother that the capitalized words are the answers to the missing gaps;

" ​Assume that your firm is an importer of Mexican chairs denominated in pesos. Your competition is mainly U.S. producers of chairs. You wish to assess the relationship between the percentage change in the firm’s stock price (SPt) and the percentage change in the peso's value relative to the dollar (PESOt). SPt is the dependent variable. You apply the regression model to an earlier subperiod and a more recent subperiod. In the recent subperiod, you increased your importing volume. You should expect that the regression coefficient in the PESOt variable would be NEGATIVE in the first subperiod and NEGATIVE in the second subperiod."

This question is all about the measurement of exposure to exchange rate fluctuations. The measurement of exposure to exchange rate fluctuations is done by firms in order to be able to calculate the risk involves in exchange rate fluctuations.

In the problem given Above, as the importing volume increase, we have a negative regression coefficient in the PESOt variable.

CEO reduced the list of candidates to include only those applicants the CEO found acceptable. The CEO is implementing the political strategy of controlling the agenda. being irreplaceable. overlapping authority. emphasizing status inconsistency. relying on objective information.

Answers

Answer:

A). Controlling the agenda.

Explanation:

The CEO is here executing the political strategy of 'controlling the agenda' as he is controlling that which candidates would go further and selected for different processes. It will help him in directing the attention on candidates which he wants and limit the decision(regarding the selection of candidates) to the only ones which she/he finds desirable/acceptable. It will allow him in having a political edge and control over the decisions and have an adavantage according to the situation. Thus, option A is the correct answer.

hoose the statement that is incorrect. A. The consensus is that the​ crowding-out effect is strong enough to make the government expenditure multiplier less than 1. B. The government expenditure multiplier is the quantitative effect of a change in government expenditure on real GDP. C. The tax multiplier is the quantitative effect of a change in taxes on real GDP. D. The​ demand-side effects of a tax cut are likely to be larger than an equivalent increase in government expenditure

Answers

Answer: D. The​ demand-side effects of a tax cut are likely to be larger than an equivalent increase in government expenditure

Explanation:

There is now a consensus amongst economists that an increase in Government spending will have larger demand-side effects than a tax cut. This is because Government spending goes directly into the economy and stimulates growth through the ripple effect that it has that will see money multiplied.

Tax cuts on the other hand are only effective if consumers either consume the tax savings or invest them. While they will do this for most of the savings, there is a high probability that they will save some of them instead of spending them.

These graphs represent the price and output quantities of purses under perfect competition and monopoly. How much more or less will Jackie pay for a purse in a perfect competition than in a monopoly?
A) $20 more
B) $10 less
C) $20 less
D) $40 less

Answers

Answer:

C) $20 less

Explanation:

I have uploaded the graph below.

We can see in the graph that in perfect competition, Jackie will pay $30 dollars for five purses, while in monopoly, she will pay $50 dollars for the same quantity of purses, meaning that she will pay $20 less.

This situation shows one key difference between the two market structures: in perfect competition, prices are lower because they are equal to marginal cost, while in monopoly, prices are higher because they are more than the marginal cost.

Major American car manufacturers are offering buying incentives to newly graduated college students who traditionally have little or no credit. Car manufacturers are using which of the following market modification strategies?
a) finding new users
b) increasing use by existing customers
c) modifying the product
d) creating new use situations

Answers

Answer:

a) finding new users

Explanation:

In this specific scenario, these car manufacturers are looking to find new users with these strategies. By providing these incentives the newly graduated college students are enticed by the offer since they want to buy a car but other manufacturers do not have these options to help the students finance their purchase. Therefore these students would choose these Major American car manufacturers thus becoming new users for them.

uan Perez, who is turning age 65 next month, intends to work for several more years at Smallcap, Incorporated. Smallcap has a workforce of 15 employees and offers employer-sponsored healthcare coverage. Juan is a naturalized citizen and has contributed to the Medicare system for over 20 years. Juan asks you if he will be entitled to Medicare and if he enrolls how that will impact his employer-sponsored healthcare coverage. How would you respond?

Answers

Answer:

The common requirements to qualify for Medicare are:

US citizen or permanent resident for at least 5 years.Currently receiving social security benefits or qualified to receive them in the futureYour spouse is employed by the government and he/she has paid Medicare payroll taxes.

Apparently "J"uan Perez complies with them since he is a US citizen and has been contributing to Medicare for more than 20 years. Therefore, he should be eligible for it and Medicare would become his primary healthcare insurer. After Juan is enrolled in Medicare, his employer will no longer be required to provide sponsored health coverage.

A market demand curve shows Group of answer choices the sum of all prices that the individual buyers are willing and able to pay for each possible quantity of the good. the relationship between price and the number of buyers in a market.

Answers

Answer:

the sum of all prices that the individual buyers are willing and able to pay for each possible quantity of the good.

Explanation:

Market demand refers to the sum of the individual demand for a commodity from all buyers in a given market.

A market demand curve is therefore a graph that shows the the sum of the individual demand for a commodity from all buyers in the market.

Therefore, the correction option is "the sum of all prices that the individual buyers are willing and able to pay for each possible quantity of the good".

Note that the market demand curve is a downward sloping curve due to the fact that there is a negative relationship between price and quantity demanded. That is, as price increases, the quantity demanded decreases. On the other hand, as price decreases, the quantity demanded increases.

Also note that an example of a market demand curve is given in the attached graph. From the graph, it can be seen that when price is [tex]p_{0}[/tex], quantity demanded is [tex]q_{0}[/tex]. But when price falls to [tex]p_{1}[/tex], quantity demanded increased to [tex]q_{1}[/tex]. This shows the negative relationship between price and quantity demanded as explained above.

How is a cost-leader protected from threats from powerful suppliers? It is able to create a significant difference between perceived value and current market prices. It is more able to absorb price increases through generating higher profit margins. It is able to create a significant difference between actual value and future market prices. It is more able to absorb price increases through accepting lower profit margins.

Answers

Answer:

Option B (By embracing lower operating costs it's much more likely to handle price rises) is the correct choice.

Explanation:

Cost management or leadership seems to be an organizational practice introduced by Michael Porter. This helps build organizational competitive benefits. Price leadership relates to supplying the market with the cheapest operating costs, which varies from the pricing strategy. Sometimes it is driven by performance, size, complexity, reach, infrastructure as well as the perspective of the organization.

Some other options given should not be concerning the condition in question. And the correct response would be alternative B.

Loft Industries sells roof trusses to contractors and builders and is currently looking for honest feedback on its services. However, in the past, most of its efforts to procure feedback from customers did not yield any meaningful data. According to the marketing managers of Loft Industries, feedback was more polite than honest. Which of the following contact methods should Loft Industries most likely use to maximize its chances of receiving honest and impersonal feedback?
A) online focus groups
B) telephone interviews
C) mail questionnaires
D) group interviews
E) personal interviews

Answers

Answer:

The correct answer is C. Mail questionnaires.

Explanation:

Given that the company needs honest and sincere feedback regarding the quality of its products, and that its clients have so far not given the desired answers due to their education and lack of critical focus as a way to avoid hypothetical conflicts, the correct way to obtain honest and impersonal feedback regarding the quality of their products would be through mail questionnaires.

This is so because through these questionnaires, direct contact between the members of the company and its clients would be avoided, making the criticism or assessment much less personal for the client, which could be expanded without fear of possible reproach on the part of the members of Loft Industries. In this way, a space of sincere expression would be generated that would allow an objective assessment on the part of the clients.

On January 1, year 1, Clem Corp. purchased equipment for $160,000. The equipment has a residual value of $10,000, and has a life of 100,000 hours. Clem uses the units-of-production method of depreciation. In year 1, Clem used the machine 2,000 hours, and in year 2, Clem used the machine 3,000 hours. What is the depreciation expense for year 2

Answers

Answer:

4,500

Explanation:

Depreciation is the systematic allocation of the cost of an asset over its useful life period. The various method of depreciation are straight line , reducing balance , units of production etc.

Using the units of production to calculate the depreciation for year 2, we have

Cost of equipment = 160,000

Residual value = 10,000

Depreciable amount = 160,000-10,000 =150,000

Total production hours = 100,000

Production hours used in year 2 =3,000

Depreciation for year 2 = 3,000/100,000*150,000 = 4,500

You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You expect to receive both $1.70 in dividends and $30 from the sale of the share at the end of the year. The maximum price you would pay for a share today is __________ if you wanted to earn a 12% return.

Answers

Answer: $28.30

Explanation:

Given the following :

Expected Dividend = $1.70

Earning from share sale at year end = $30

Expected rate of return on investment = 12%

Maximum price of stock :

(Earning from share + expected Dividend) / (1 + return rate)

(30 + 1.70) / ( 1 + 12%)

(30 + 1.70) / (1 + 0.12)

(31.70) / (1.12)

= $28.303571

= $28.30

. Why does Starbucks Coffee consider internal leadership such an important part of its core business process?

Answers

Answer:

Starbucks Coffee consider internal leadership an important aspect of its core business because it understands and appreciates the idea of planning for one's own succession.

Explanation:

Internal Leadership can be defined as an ability to oneself. Many times it is a neglected aspect of leadership, but a leader who knows how to lead himself have thriving possibility to lead others as well.

Starbucks Coffee is considered one of the companies in which people like to work. It is because Starbucks Coffee has given much importance to the aspect of internal leadership development. This aspect is usually overlooked in many companies but is accepted and adopted by Starbucks Coffee. The company understands that everyone has right to plan for one's own succession and thus keeps itself prepare for top-level-successors. The company provides an environment growth and becoming a successful leader to the educated employees that come for work in the company.

Garland Company received proceeds of $235000 on 10-year, 6% bonds issued on January 1, 2018. The bonds had a face value of $250000, pay interest annually on January 1, and have a call price of 101. Garland uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2020? $236500 $246700 $250000 $238000

Answers

Answer:

$238000

Explanation:

The computation of the carrying value of the bond is shown below:

Given that

Face Value of Bonds = $250,000

Proceeds from issuance of bonds = $235,000

Before that we need to compute the following things

Now

Discount on Bonds Payable = Face Value of Bonds - Proceeds from issuance of bonds

= $250,000 - $235,000

= $15,000

Life of Bonds = 10 years

Now

Discount on Bonds amortized annually = Discount on Bonds Payable ÷ Life of Bonds

= $15,000 ÷ 10

= $1,500

Now

Discount amortized is

= Discount on Bonds amortized annually × expired life

= $1,500 × 2

= $3,000

Finally

Carrying Value of Bonds = Issue Price + Discount amortized

= $235,000 + $3.000

= $238,000

The fixed cost of Widget Corp., a keyboard manufacturing company, is $600,000 per year. The cost of equipment and labor to make one keyboard is $10. If the customers would pay $25 to buy one keyboard, Widget Corp. needs to sell _____ keyboards to make profits.

Answers

Answer: more than 40000

Explanation:

Given : Fixed cost per year = $600,000

Cost of equipment and labor to make one keyboard = $ 10

Selling price of 1 keyboard = $25

Gain on each keyboard = Selling price - cost

= $25 - 410

= $15

Minimum number of keyboards need to sell to make profit =  ( Fixed cost) ÷ (Gain)

= 600,000  ÷  15

= 40000

Hence, Widget Corp. needs to sell more than 40000 keyboards to make profits.

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Answers

Answer:

The policy provision which is usually inserted to allow for Life Insurance policies to be reactivated after it has lapsed is called the Reinstatement Provision.

Explanation:

The reinstatement provision usually permits the policyholder a certain limit of time after the policy has expired within which they must renew the policy by paying the required premium (which in this case may come with interest).

They must also provide evidence of insurability; that is, medical proof of good health. A Medical History Statement (MHS) would usually suffice as proof of insurability.

 

Cheers!

The Reinstatement Provision is part of the policy that is typically added to enable the reactivation of Life Insurance policies after they have expired.

An insurance policy clause known as a reinstatement clause specifies when coverage conditions are reset if an insured person or company files a claim because of prior loss or damage. Reinstatement provisions typically do not change the terms of a policy, but they do enable the insurance to resume providing coverage for future claims.

The reinstatement clause often gives the policyholder a certain amount of time after the policy has ended in which to renew it by paying the requisite premium (which in this case may include interest). Additionally, they must offer proof of insurability, such as a clean bill of health.

Learn more about the reinstatement provision here:

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Economies of scale arise when a. an economy is self-sufficient in production. b. individuals in a society are self-sufficient. c. fixed costs are large relative to variable costs. d. workers are able to specialize in a particular task

Answers

Answer:

d. workers are able to specialize in a particular task.

Explanation:

In Microeconomics, economies of scale can be defined as cost reductions or cost advantages that arises when a business entity is increases its  production or are large in size.

This ultimately implies that, when an organization chooses a convenient scale of operation or reduce its scale of production, this would lead to a reduction in the cost of production and consequently, some benefits such as lower long-run average cost, increased sales, profits and lower cost price for the consumers of these finished products.

Generally, economies of scale arise when workers are able to specialize in a particular task. This is so because having a good number of professionals and experts would increase the level of production or output, as they are quite conversant with the best method of production, time management and efficiency.

Mike is driving over to his girlfriend's apartment and decides to buy some gum. He could stop in a gas station, go to any grocery store, go to any discount store, or even buy some out of a vending machine. The reason Mike has so many options to buy gum is because chewing gum companies strive for _____ channel coverage.

Answers

Answer:

Intensive.

Explanation:

In this scenario, Mike is driving over to his girlfriend's apartment and decides to buy some gum. He could stop in a gas station, go to any grocery store, go to any discount store, or even buy some out of a vending machine. The reason Mike has so many options to buy gum is because chewing gum companies strive for intensive channel coverage.

An intensive channel coverage is a sales method which is typically focused on providing varieties of sales outlets or channels for customers to buy their desired products.

Companies operating under the intensive channel coverage, are usually aimed at saturating the market with their products, by using all available sales outlets.

Hence, Mike had so many outlets where he could buy gum from because chewing gum companies strive for intensive channel coverage in order to reach out to potential customers. Other examples of companies that use the intensive coverage channel are cigarette, beer etc.

During the market testing stage of the new-product process, a product may be tested multiple times with consumers to get their reactions with test marketing, one type of which is known as

Answers

Answer:

Simulated test markets.

Explanation:

During the market testing stage of the new-product process, a product may be tested multiple times with consumers to get their reactions with test marketing, one type of which is known as simulated test markets.

A simulated test market can be defined as a marketing research technique that involves the exposure of consumers to an unreal market in order to observe their reactions to a new product. It involves advertising in stages through a simulated market so as to determine a customer's purchase decision, forecast demand and market analysis for a new product.

Hence, a simulated test market is aimed at observing and analyzing potential customer's reaction to a new product before it's introduced to the market.

Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,400. Cashreceipts are expected to be $641,000 and cash payments for purchases are expected to be $608,500.Other cash expenses expected are $27,000 selling and $33,500 general and administrative. The companydesires a minimum cash balance at the end of each month of $30,000. If necessary, the companyborrows enough cash to meet the minimum using a short-term note. The amount Webster must borrowduring April is:A) $0.B) $21,600.C) $8,400.D) $98,900.E) $58,000.

Answers

Answer:

Webster Corporation

Amount to borrow in April

B) $21,600.

Explanation:

a) Webster Corporation

Cash Budget for the month of April

Beginning Cash balance    $36,400

Cash receipts                      641,000

Total receipts                     $677,400

Cash expenses:

Purchases        $608,500

Others                  27,000

Selling & Admin.  33,500  669,000

Balance                                   8,400

Borrowing                             21,600

Minimum cash balance     $30,000

b) Webster's cash budget for April shows that it needs to borrow $21,600 in order to meet the minimum cash balance of $30,000.  This is because the company does not generate enough cash in April to pay for expenses and meet minimum requirements for cash balance every month.  The preparation of Webster Corporation's Cash Budget is a way of planning for the occurrence of the cash shortage that necessitated the borrowing.

Waterway Company made a purchase of merchandise on credit from Carla Vista Company on August 8, for $9200, terms 3/10, n/30. On August 17, Waterway makes the appropriate payment to Carla Vista. The entry on August 17 for Waterway Company is:

Answers

Answer:

Dr Accounts Payable 9,200

Cr Inventory 276

Cr Cash 8,924

Explanation:

Preparation of the Journal entry on August 17 for Waterway Company

Since we were told that the company made a credit purchase of the merchandise on Aug 8 for the amount of $9,200 with a terms of 3/10 from Carla Vista Company this means that the transaction will be recorded as:

Dr Accounts Payable 9,200

Cr Inventory 276

(3%×9,200)

Cr Cash 8,924

(97%*9,200)

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