Snow Industries issued 5 year, 5% bonds with a face value of…

Snow Industries issued 5 year, 5% bonds with a face value of $150,000.  The bonds pay interest on July 1 and December 31 each year.  The market rate for these bonds was deemed to be 7%.  Using the factors below, your calculator or Excel, calculate the carrying value of the bonds at the date of issuance. Rate 3.5% 2.5% Present Value of (1) for 10 periods .70892 .78120 Present Value of an Annuity for 10 periods 8.31661 8.75206  

Obtronics purchased a piece of manufacturing equipment for $…

Obtronics purchased a piece of manufacturing equipment for $200,000 with a five-year useful life and no salvage value.  If Obtronics sells the machine for $150,000 at the end of the third year, which of the following statements is true? I: The gain on sale will be larger if Obtronics uses the double-declining balance method versus the straight-line method of depreciation  II: The gain on sale will be larger if Obtronics depreciates the machinery using the straight-line method of depreciation versus the double-declining balance method  III: The gain on sale will be the same regardless of depreciation method   IV: Obtronics will incur more depreciation over the first three years of the useful life using the double-declining balance method versus the straight-line method of depreciation 

Elmo, Corp. issued a 3-year, zero-interest bearing $30,000 n…

Elmo, Corp. issued a 3-year, zero-interest bearing $30,000 note receivable to Oscar Industries as payment for services that Elmo provided to Oscar. The market rate of interest for a note with a similar risk is 5%.  What amount of service revenue would Elmo report on their income statement at the date of issuance? The present value of one for 3-periods at 5% is: .86384 The present value of an ordinary annuity for 3-periods at 5% is 2.72325