Fleak Corporation borrows money by issuing a three- year periodic and lump- sum payment note payable with a face value of $ 300,000 and a face rate of 7 percent that is paid annually. The market rate of interest is 6 percent when Fleak takes this note to the bank. What will be the cash inflows shown on the budgeted statement of cash flows? What will be the cash outflows shown on the budgeted statement of cash flows for the first year? What is the amount of interest expense shown on the budgeted income statement for the first year? Why is this latter amount different than the cash outflows for the first year?
Answer to relevant QuestionsKerby Company will issue a $ 400,000, five-year, 7 percent periodic and lump- sum payment note when the market interest rate is 8 percent. The face rate of interest is paid semiannually. Determine the amount of cash the ...Knoepfle Corporation’s bonds have a face value of $ 11,000,000 and a call price of 103. On February 1, 2012, the bonds have a carrying value of $ 11,200,000 on Knoepfle’s books and a market price of 98 3 4 in the ...For a lump-sum payment note: (a) Describe the cash outflows shown on the budgeted cash flow statement over the life of the note. (b) Describe the change in the interest expense shown on the budgeted income statement over ...Barden Company needs to borrow $ 500,000. It agrees to make monthly payments of principal and interest over the next 12 years. The bank agrees to loan Barden the money at 6 percent interest. Required: A. How much money will ...Why is the par value rather than the market value recorded in a stock account?
Post your question