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If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash?

1. The following selected amounts are available for Sanders Company.

Retained earnings (beginning) $800

Net loss 100

Cash dividends declared 100

Stock dividends declared 50

What is its ending retained earnings balance?

2. A corporation has the following account balances: Common stock, $1 par value, $40,000; Paid-in Capital in Excess of Par Value, $1,350,000. Based on this information, the

a. legal capital is $1,390,000.

b. number of shares issued are 40,000.

c. number of shares outstanding are 1,390,000.

d. average price per share issued is $3.48.

3. If Vickers Company issues 4,000 shares of $5 par value common stock for $140,000,

a. Common Stock will be credited for $140,000.

b. Paid-In Capital in Excess of Par Value will be credited for $20,000.

c. Paid-In Capital in Excess of Par Value will be credited for $120,000.

d. Cash will be debited for $120,000.

4. If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?

please help! best answer gets 10 points!

2 Answers

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  • Don G
    Lv 7
    1 decade ago
    Favorite Answer

    1 - 550

    2 - b

    3 - c

    4 - 210,000

  • Anonymous
    5 years ago

    NO... Government bonds are the absolute WORST POSSIBLE INVESTMENT... they only pay about 4 percent under the best of circumstances that they charge through the nose for capital gains... so even that 4 percent is more like 2 percent.... Government bonds are a JOKE...

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