Answer:
B) They should demonstrate how their product will help the customers achieve personal status and recognition.
Explanation:
The social style matrix uses personality traits to categorize customers. It divides people into four categories:
Driving Style: controlling, determined and active peopleExpressive Style: enthusiastic and emotional peopleAmiable Style: friendly and relationship driven peopleAnalytical Style: thoughtful and reserved peopleSince we are trying to sell goods to expressive people, then we must focus on how the goods will make them feel more important (VIPs). They seek the attention and notice of other people (they are show-off people). They want to feel important and they will buy goods that make them feel that way.
In the early 14th century, the agricultural economy in Europe had begun to:
a. fail due to papal restrictions on monastic houses.
b. fail due to climate change and excessive cultivation.
c. regain levels achieved in the late Roman Empire.
d. improve due to rising average temperatures."
Answer:
B) fail due to climate change and excessive cultivation.
Explanation:
Many problems that modern civilization is currently facing where also a problem hundreds of years ago. An example of this is that excessive agriculture during the middle ages in Europe lead to the reduction of forests (which lowered rain levels) and the wear out of soil which eventually ended up reducing the amount of crops and hurting local economies. That lead to an increase in the amount of poor farmers that left the countryside and moved into larger cities.
The terms below are measures or individual components of the money supply. Specifically considering the money supply of the United States, rank these items from largest to smallest in terms of dollar value. M2, currency, travelers checks, balances in savings accounts, M1
Answer:
M2 balances in savings accounts M1 currency travelers checksExplanation:
The money supply is the total amount of money available in an economy. It includes:
M1 includes coins and notes (bills) in circulation, travelers' checks and other money equivalents that are easily liquidated.M2 includes M1 plus short term bank deposits (including savings accounts) and 24 hour money market funds.M3 includes M2 plus long term bank deposits and money markets with more than 24 hour maturity.If a retired worker receives a fixed income of $45,000 a year from a pension plan, and there is a fall in the economy this year resulting in deflation, then _____.
A. the purchasing power of his fixed income would rise compared to last year
B. the purchasing power of his fixed income would be unknown without a better idea of the price level
C. the purchasing power of his fixed income would fall compared to last year
D. the purchasing power of his fixed income would remain the same compared to last year
Answer:
A. the purchasing power of his fixed income would rise compared to last year
Explanation:
Deflation is an economic situation where there is a general decline in prices. Deflation is as a result of a low rate of inflation or inflation is negative. Therefore, deflation is the exact opposite of inflation. At inflation, currencies lose their purchasing power, but at deflation, they gain buying power.
A reduction in the supply of money and credit in the economy causes deflation. The implication is that there will be many sellers or suppliers verses very few buyers, which leads to unhealthy competition amongst the sellers. When the supply is high, and demand is low prices tend to decline.
With a fixed income of $45,000, the workers will have a higher purchasing power as prices will decline.
Answer:
A
Explanation:
When deflation happens, there is a reduction of the general level of prices in an economy. As a result, the purchasing power of the fixed income of the retired worker will increase compared to last year.
If you buy a stock at the beginning of the year at a price of $60, the company pays two quarterly dividends to $2 and then raises their dividend to $3 for the last two quarters of the year, and you sell the stock at the end of the year for $63, what was your return?
Answer:
Our return on the stock was 21.6%
Explanation:
In order to find our return on the stock we need to first add all the dividends and the selling price in order to calculate how much cash inflow we got from the cash. Then we will subtract the buying price of the stock from this as this is a cash outflow and by subtracting the buying price we will get the net cash inflow from the stock, we will then divide the net cash inflow by the buying price to get the return on the stock.
Dividend first quarter = 2
Dividend second quarter = 2
Dividend third quarter = 3
Dividend fourth quarter = 3
Selling price = 63
Total cash inflow = 63+3+3+2+2= 73
Selling price = 60
Net cash inflow = 73-60= 13
Return = 13/60=0.216= 21.6%
Assume that a comparable worth law is passed that determines that kindergarten teachers and bricklayers have comparable jobs; therefore, workers in both of these occupations should be paid the same wages. Assume that prior to the law, bricklayers were paid a higher wage than kindergarten teachers. Which of the following is the most likely result of the comparable worth law? There will be surplus in the market for bricklayers and a shortage in the market for kindergarten teachers. The equilibrium wage will be the same for kindergarten teachers and bricklayers. There will be a shortage in the market for bricklayers and a surplus in the market for kindergarten teachers. Some former bricklayers will become kindergarten teachers and some former
Answer:
The correct answer is There will be a shortage in the market for bricklayers and a surplus in the market for kindergarten teachers.
Explanation:
Comparable value is the abbreviation of "equal salary for work of equal value" or "equal salary for work of comparable value". The doctrine of "comparable value" is an attempt to remedy wage inequalities that result from a long history of work segregated by sex and different salary scales for "female" and "male" jobs. From this point of view, market rates reflect past discriminatory practices and may not be the only basis for deciding current wage equity.
Comparable value refers to the skills and responsibilities of the different jobs, and tries to correlate the compensation with those skills and responsibilities.
Comparable value systems seek to more equitably compensate for jobs performed primarily by women or men by comparing educational and skill requirements, task activities and responsibility in different jobs, and trying to compensate each job in relation to such factors in Instead of the traditional ones, pay for the work history.
Answer:
There will be a shortage in the market for bricklayers and a surplus in the market for kindergarten teachers.
Explanation:
When Douglas, an employee at Donovan Corp., was unable to complete a project on time, his manager, Tyler, assumed that Douglas missed the deadline because he was insincere. Douglas could not meet the deadline because his computer was infected with malware. In this scenario, Tyler's perception of Douglas represents a _____.
A) selective attribution errorB) defensive biasC) self-serving biasD) fundamental attribution error
Answer:
The correct answer is D
Explanation:
Fundamental attribution error is the kind of error where the tendency for explaining the behavior of person grounded on internal factors like disposition or personality and in order to underestimate the influence that external factors like the situational influences.
In this case, an employee who unable to complete the project due to computer got infected but the manager think that Douglas unable to complete the project because he is insincere. So, it represent the fundamental attribution error.
"Cleaners & Solvents, Inc. (CSI), engages in deceptive advertising when it markets its product Dirt Remover as able to kill germs over long periods of time. In an action against CSI regarding Dirt Remover, the firm is ordered to stop its false advertising of Dirt Remover and other products. This is_________.
Answer: A multiple product order
Explanation:
A multiple product order is an order by the regulating body (Federal Trade Commission) to curb and desist from deceptive advertising of not only the target product but all the products produced by a particular firm that is engaged in deceptive advertising. Such as in the case above, the order to CSI is not only to stop its false advertising of dirt remover but also other products produced by CSI
A company produces four reports in its responsibility reporting system, one for each level of management: department managers, plant managers, division managers, and the company vice president (listed in order of responsibility). Which statement is correct concerning the content of the respective reports?
Answer:
Explanation:
The department manager sees controllable costs of his or her respective department
Tony's Carpets wants to charge $9.80 a yard for installing a carpet for Serenity Bookstore but accidentally states $8.90 a yard in the bid. Serenity Bookstore accepts Tony's bid. Tony's carpets made a ___ mistake.
a. bilateral
b. unilateral
c. mutual
d. rescission
e. fraudulent
Answer:
The correct answer is (B)
Explanation:
The unilateral mistake can incorporate various parts of the agreement including explicit laws, facts, or term definitions. Going into a legitimate agreement necessitates that the two gatherings completely comprehend the terms and duties of the agreement. A case of a unilateral failure happens when one of the gatherings does not understand every aspect of the agreement. Unilateral failures will in general be more typical than bilateral when managing contracts.
Final answer:
Tony's Carpets made a unilateral mistake by accidentally stating $8.90 a yard in the bid instead of the intended $9.80 a yard, which Serenity Bookstore accepted. This error was made by Tony's Carpets alone and does not involve any mistake on the part of Serenity Bookstore. The correct option is b.
Explanation:
Tony's Carpets made a unilateral mistake. A unilateral mistake occurs when only one party to a contract is mistaken about a material fact and the other party is or should be aware of the mistake. In this scenario, Tony's Carpets intended to charge $9.80 a yard for installing carpet but mistakenly put $8.90 a yard in their bid to Serenity Bookstore, which Serenity accepted. This mistake was made solely by Tony's Carpets, without Serenity Bookstore contributing to the error, making it unilateral. A would involve both parties being mistaken about a material fact, which is not the case here. Mutual mistake would mean both parties share the same erroneous belief about an important fact, which also does not apply. A rescission is a remedy to nullify a contract, which might be sought after a mistake is discovered. Lastly, there is no evidence of a fraudulent mistake here, which would involve intentional deception by one party.
Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $800 account of a customer, C. Green. On March 9, it receives a $300 payment from Green. Record the cash receipt from Green.
Answer:
Explanation:
The journal entry is shown below:
On March 9
Cash A/c Dr $300
To Account receivable - Green A/c $300
(Being the cash received is recorded)
For recording the cash receipts we debited the cash account and credited the account receivable account so that the correct posting can be done
All other information which is given is not relevant. Hence, ignored it
You are the production manager of an electronics company and learn from the marketing manager that there is an unexpected high demand for your new product. You are confident your operation can produce enough goods to meet the demand with the equipment and labor force you have. What type of production do you manage?
You are managing flexible production where you can smoothly adjust to changes in demand and supply conditions. As demand for your product increased, you are capable of ramping up production using your current workforce and technology.
Explanation:You are managing a type of production known as flexible production. This means you are able to adapt to changes in demand and supply conditions smoothly. Here, the unexpected high demand for your product led to an increase in both the output price and profitability. This, in turn, influenced you to demand more labor to increase production. Flexible production allows you to increase production without needing to make significant changes to your facilities or labor force.
Furthermore, in this context, technology refers to several methods of combining inputs to produce outputs. The key is to search for a production technology that enables you to produce the desired level of output at the lowest cost, hence maximizing profits. For instance, the firm might opt to hire more labor or invest in more efficient machinery to enhance production.
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On November 1, 2018, ABC Corp. borrowed $100,000 cash on a 1-year, 6% note payable that requires ABC to pay both principal and interest on October 31, 2019. The journal entry on November 1, 2018 would include which of the following?
A. credit to Cash of $1,000B. credit to Interest Payable of $1,000C. credit to Note Payable of $1,000D. debit to Interest Expense of $6,000
Answer:
C) credit to Note Payable of $1,000,000
Explanation:
The complete journal records for November 1, 2018 are:
Dr Cash account 100,000Cr Notes Payable account 100,000The company received $100,000 in cash. Since cash is an asset and it increased when the bonds were issued, it should be debited.
The company has to pay a note worth $100,000. Since notes payable is a liability and it increased when the bonds were issued, it should be credited.
Lois walked into ABC Company to pick up an application for a secretarial job. When she asked about the duties and working conditions, the busy receptionist handed her a document that gave her a clear picture of the position. The receptionist gave Lois a job
Answer:
description
Explanation:
A job description is simply a document that clearly states all the necessary skills and abilities needed to perform a specific job. It should also include the duties and responsibilities that the person hired for that job will be required to do.
Job descriptions can be used externally (e.g. job hiring sites) to attract potential candidates and internally by HRM in the candidate selection process. The job description used by HRM is more complete than the public one and should include performance evaluations, psychological testing, etc.
Over the past decade, the demand for goods produced in China has brought a sustained
increase in demand for China’s exports that has outstripped the growth of supply. As a result,
China has experienced a
a. Period of stable prices and sustained economic growth.
b. Rising price level and demand-pull inflation.
c. Rising price level and cost-push inflation.
d. Rising price level and falling real wage rate.
e. None of the above.
Answer:
The correct answer is b. Rising price level and demand-pull inflation.
Explanation:
Supply economics is a macroeconomic school that argues that economic growth can be achieved more effectively with measures that increase aggregate supply by reducing barriers to people who produce (supply) goods and services, such as reducing taxes and by allowing greater flexibility through deregulation. According to supply economics, consumers will end up benefiting from a greater supply of goods and services at lower prices. Typical policy recommendations of supply economists are lower tax rates and lower legal regulation of economic activity.
The sustained increase in demand for China's exports has led to rising price levels and demand-pull inflation.
Rising price level and demand-pull inflation are the consequences of the sustained increase in demand for China's exports that has outstripped the growth of supply over the past decade. As demand exceeds supply, prices increase due to the imbalance between the two factors, leading to inflation characterized by rising prices.
All else constant, if butter and margarine are substitute goods, then as the price of butter rises,
a. the demand for margarine will fall
b. the quantity of butter demanded will fall
c. the demand for butter will fall
d. the demand for butter will rise
e. butter and margarine will become complementary goods, provided that butter is a normal good
The beef industry denies that "mad cow" disease is an issue in the U.S., resists increased inspections of cattle arriving slaughterhouses, and calls on cattlemen nationwide to persuade their representatives and senators in Congress to stop legislation to require "tracking" of cattle to their sources. What best describes the industry’s approach?
Answer: Reactive Public Relation
Explanation:
Here, in this particular case we can state that the reactive public relation tends to best describe this approach taken by the industry. Traditionally, the reactive public relation is known to be referred when there is a requirement for crisis management. For several organizations , the known resort still tends to be reactive public relation.
The beef industry's approach includes resistance to regulation, denial of 'mad cow' disease risks in the U.S., and lobbying against cattle tracking to protect economic interests.
The beef industry's approach to resisting increased inspections, dismissing the severity of 'mad cow' disease in the U.S., and lobbying against cattle tracking legislation could best be described as protective of industry interests. This stance is focused on maintaining current business practices, avoiding the potential costs associated with stricter regulations, and influencing governmental policy to safeguard their economic interests. The industry calls upon cattlemen to exercise their political power to prevent legislation that might impose additional costs or restrictions, signaling an active and coordinated effort to shape industry-related policy.
GavelCo Insurance sells an insurance policy to Barry in the state of Colorado. GavelCo violates a Colorado state statute when doing so. Later Barry gets into a dispute with GavelCo over coverage of the insurance policy and wants to enforce the insurance contract. The insurance contract will be_______________.a. unenforceable.b. enforceable, but only if a court finds the contract unconscionable.c. enforceable by both parties, like any other contract.d. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.
Answer:
d. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable.
Explanation:
The insurance policy is actually sold already to Barry. And now the insurance company is liable for any kind of damages to Barry.
If Barry by any chance has violated any state law of Colorado then he shall be responsible for that. But the insurance company has to make all good to Barry.
As the insurance company cannot withdraw the insurance coverage just because there is violation with some other context and not with the insurance agreement.
The insurance is enforceable and that he can recover from insurance company for any damages caused, if that is covered in insurance policy.
Brenda graduated with her B.A. in business administration and was surprised when she was told she was unqualified to run the human resources department in several companies without work experience. Now she must decide what to do as a stepping stone to reach her goal.
Which option best fits Brenda's goals?
a.Take a lower level job in a human resources department for experience.
b.Move to a bigger city where there is a greater need for human resources directors.
c.Go to graduate school to build her educational credentials.
d.Earn a bachelor's degree in a different subject for flexibility.
Answer:
a.Take a lower level job in a human resources department for experience.
Explanation:
For Brenda to be able to progress to the next stage, she needs to address the issue holding her back. From the feedback that Brenda has received, she needs work experience to run a human resource departments. Brenda should then find a way of adding work experience to her credentials.
The most appropriate way for her to gain experience is by taking a lower level job in a human resource department. By doing so, Brenda will gain hands on experience on human resources operations. She will get an opportunity to work under a manager. That way, she will acquire the practical skills of a human resources manager.
Chaletland should _____ interest rates during a recession and _____ interest rates during an economic boom in order to maintain long-run equilibrium.
a) increase; increase
b) decrease; decrease
c) decrease; increase
d) increase; decrease
Answer:
The correct answer is option c.
Explanation:
During the recession, production and investment get reduced. A decrease in the interest rate will reduce the cost of borrowing. This will make borrowing funds for investment cheaper.
As a result, investment spending will increase. As firms invest more they will need more workers. So production and employment will increase as well.
During inflation, there is increased demand and a higher price level. An increase in the interest rate will increase the cost of borrowing. This will make borrowing expensive. Investment spending will decline. This will cause the aggregate demand to reach to its long-run equilibrium level.
Cost management of services__________.
a. includes demand management and supplier cost structure analysis.
b. is confined to internal demand analysis and consumption management.
c. is confined to supplier cost structure analysis.
d. focuses primarily on better design of the service.
e. is only possible when the service is highly tangible.
Answer:
The correct option is A
a. includes demand management and supplier cost structure analysis.
Explanation:
Cost management deals with managing the budgets of a businesse. In order to have an effective cost management process, the demand and supply cost structure must be analysed effectively. During cost management, goods that should be purchased should be strategic goods
Andrew, a project manager in a multinational company, accepts a very challenging project from his client as he feels that the employees have the capacity for imagination, creativity, and ingenuity in them to complete the project. In this scenario, Andrew's attitude toward his workers is consistent with the assumptions of _____.
A. Theory X
B. Theory Y
C. expectancy theory
D. equity theory
Answer:
B. Theory Y
Explanation:
In Theory Y, the manager believes employees are internally motivated, creative, imaginative and have ingenuity. Employees are given more difficult tasks with less supervision.
From the above description of theory Y, Andrew's behaviour is consistent with theory Y.
In theory X, managers believe that employees are lazy, unimaginative and pursue their personal interests. Managers have to coerce employees to work through strict supervision, punishments and laws
Expectancy theory states that people choose the option that maximises benefit and minimises pain.
Equity theory focuses on the fair distribution of resources.
Which of the following is true about product markets?
A. Goods and services flow from households to firms.
B. Factors (land, labor, capital, and entrepreneurial ability) flow from households to firms.
C. Factors (land, labor, capital, and entrepreneurial ability) flow from firms to households.
D. Goods and services flow from firms to households.
Answer:
The correct answer is option D.
Explanation:
A product market deals with goods and services. In a product market goods and services are supplied by firms and businesses and purchased by households.
The households in exchange pay businesses and firms which is known as consumer spending for households.
A product market is concerned with the flow of finished goods and services, it does not involve trade in raw materials and other intermediate goods.
In product markets, goods and services flow from firms to households. Households provide factors such as land, labor, and capital to firms, which in return produce goods and services that flow back to the households.
Explanation:The correct answer is D. Goods and services flow from firms to households. In a traditional economic model, households provide factors such as land, labor, capital, and entrepreneurial ability to firms. In return, firms use these factors to produce goods and services, which are then supplied back to the households in the product market. This is known as the flow of goods and services. An example could be a household providing their labor (considered a factor) to a company, and in return, the company pays them with money, which the household uses to buy goods and services from the company.
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If Electrocomp decides that at least 20 air conditioners should be produced but no more than 80 fans should be produced, the optimal production mix of air conditioners and fans is __________. (The first number is for air conditioners and the second for fans.)
Answer:
40 air conditioners
60 fans
Explanation:
If the conditions are as follows:
Each air conditioner takes 3 hours of wiring and 2 hours of drilling.
Each fan must go through 2 hours of wiring and 1 hour of drilling.
During the next production period, 240 hours of wiring time are available and up to 140 hours of drilling time may be used.
Each air conditioner sold yields a profit of $25.
Each fan assembled may be sold for a $15 profit.
Robert purchased and placed in service $100,000 of 7-year class assets on August 10 of the current year. He also purchased and placed in service $500,000 of 5-year class assets on November 15 of the current year. He does not claim any available additional first-year depreciation. If Robert elects to use the MACRS straight-line method of cost recovery on the 7-year class assets, discuss the calculation of cost recovery for the 5-year class assets?
Explanation:
um I think 1 because I like it
On January 1, 2015, Anna invested $5,000 at 5 percent interest for one year. The CPI on January 1, 2015 stood at 2.37. On January 1, 2016, the CPI was 2.40. The real rate of interest earned by Anna was ______ percent.
a) 9
b) –5
c) 3.7
d) 5
Answer:
The correct answer is c) 3.7 .
Explanation:
The first thing we should do is calculate inflation: (2.40 - 2.37) / 2.37 = 1.3
Inflation Rate = 1.3
2.) Calculate the real interest rate
Real interest rate = nominal interest rate - inflation rate
5 - 1.3 = 3.7
3.7 is the real interest rate
Final answer:
Anna earned a real interest rate of approximately 3.7% on her $5,000 investment after adjusting for an inflation rate derived from the change in CPI from 2.37 to 2.40 during the year 2015. The correct option is c.
Explanation:
The question asks to calculate the real rate of interest earned by Anna on her investment, taking into account the inflation represented by changes in the Consumer Price Index (CPI). On January 1, 2015, Anna invested $5,000 at a nominal interest rate of 5 percent for one year. As per the formula for the nominal interest factor, Anna's investment would be worth: $5,000 × (1 + 0.05) = $5,250 after one year.
To determine the real interest rate, we need to adjust Anna's nominal interest rate by the inflation rate during that year. The inflation rate is derived from the change in CPI from the beginning to the end of 2015: ((2.40 - 2.37) / 2.37) * 100 = 1.27%. The real interest rate is then calculated by subtracting the inflation rate from the nominal interest rate: 5% - 1.27% = 3.73%, which is approximately 3.7%.
Hence, the real rate of interest earned by Anna was 3.7 percent, making the correct answer option (c).
Suppose that the price of chicken rises sharply compared to the price of turkey. In response, consumers buy more turkey and less chicken than they did in the CPI base year. In this situation the CPI will tend to ______ inflation as a result of ______ bias
a) overstate; substitution
b) understate; substitution
c) accurately measure; substitution
d) overstate; quality adjustment
Answer:
The correct answer is option a.
Explanation:
The consumer price index or CPI is a measure to calculate the change in the price level or the rate of inflation. It calculates the changes in the price of a basket of goods generally purchased by the consumers.
But CPI does not always accurately calculate inflation. It involves substitution bias and quality adjustment bias.
For instance, when the price of chicken increases as compared to the price of turkey, the consumers will buy more turkey and less chicken. So the consumer expenditure will not increase as they will be substituting turkey for chicken.
But the CPI will increase with an increase in chicken price. An increase in CPI implies an increase in inflation, so inflation will be overstated.
Which of the following statements is NOT true?
A. A net requirements plan adjusts for on-hand inventory.
B. Distortion can be minimized when safety stock is held at each workstation, rather than at the finished goods or raw material levels.
C.MRP software programs are popular because manual approaches are slow and error-prone.
D.Gross material requirements assume that there is no inventory on hand.
MRP software programs are popular not just due to manual drawbacks; they enhance accuracy and efficiency in production management. So, the correct choice is option C.
The statement that is NOT true is C. MRP (Material Requirements Planning) software programs are popular not only because manual approaches are slow and error-prone but also due to their ability to enhance accuracy, efficiency, and responsiveness in managing production processes.
Option A is true as a net requirements plan indeed adjusts for on-hand inventory. It considers the existing stock when determining the actual need for additional materials, facilitating a more precise production planning process.
Option B is true. Minimizing distortion by holding safety stock at each workstation rather than at higher levels, such as finished goods or raw material levels, can enhance responsiveness and reduce the bullwhip effect in supply chains. This practice helps align inventory levels more closely with actual demand at different stages of production.
Option D is true as gross material requirements assume no inventory on hand. It represents the total material needed for production without considering existing stock, providing a basis for determining the overall demand for materials.
In summary, option C is NOT true, as MRP software programs are popular not only due to the drawbacks of manual approaches but also for their positive impact on accuracy and efficiency in managing material requirements.
If the Fed announces that it will reduce the growth rate of the money supply to 3% next year but people do not believe it, the Fed is said to_________.
Answer:
money in circulation will reduce by 3%
Explanation:
this mean the Fed will reduce the money in circulation by 3% and this indicates that few money will be available for the purchase of goods in the country.
In a perfectly competitive industry the market price is$12. A firm is currently producing 50 units of output; average total cost is $10, marginal cost is $15, and average variable cost is $7. Is the firm making the profit-maximizing decision? Why or why not? If not, what should the firm do?Should the firm shut down? Explain.
Answer:
In a perfectly competitive industry the market price is also the marginal revenue of a firm and in order to maximize profit a firm has to produce a output at which marginal revenue is equal to marginal cost. In this case the firm's marginal revenue is fixed at 12 so they need to bring their marginal cost down to 12 in order to maximize profits. What they should do is decrease their output to a quantity so that their marginal cost is also 12, when they do this their marginal cost and marginal revenue will be equal and they will be maximizing profits.
Explanation:
Marin Inc. issues $263,000, 10-year, 7% bonds at 98. Prepare the journal entry to record the sale of these bonds on March 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer:
Explanation:
The journal entry is shown below:
On March 1, 2017:
Cash A/c Dr $257,740 ($263,000 × 98%)
Discount on issue of bonds A/c $5,260 ($263,000 × 2%)
To Bonds payable A/c $263,000
(Being the sale of bonds is recorded)
While recording the sale of bonds we debited the cash account and the discount on issue of bonds and credited the bonds payable account
Final answer:
To record Marin Inc.'s issuance of $263,000 bonds at 98, a journal entry should debit Cash for a $257,740 Discount on Bonds Payable for $5,260, and credit Bonds Payable for $263,000.
Explanation:
When Marin Inc. issues $263,000, 10-year, 7% bonds at 98, the company is selling the bonds for less than their face value. At 98, the bonds are sold at 98% of their face value, meaning that investors are purchasing the bonds for $257,740 (which is 98% of $263,000). To record the sale of these bonds, the journal entry on March 1, 2017, would be:
Debit Cash for $257,740 (98% of $263,000).Debit Discount on Bonds Payable for $5,260 (the difference between the face amount and the cash received).Credit Bonds Payable for the face amount of $263,000.The discount on the bonds payable account reflects that the bonds were sold for less than their face amount and it is considered a contra account to bonds payable. This discount will be amortized over the life of the bonds.