Solution-Final-W07

Solution-Final-W07 - Solution of the final exam COMM 217...

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Solution of the final exam COMM 217 – Winter 2007 Question 1 (21 marks; 1.5 mark each) 1. D 2. B 3. A 4. D 5. A 6. B 7. D 8. C 9. C 10. A 11. B 12. A 13 A 14. B 15 A 16. C
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Question 2 (20 marks) 1. Calculations of proceeds. Use N = 8; I = 4%. ($40,000,000 x .7307) + ($40,000,000   x .10 x 1/2   x 6.7327) = $29,228,000 + $13,465,400 = $42,693,400. 2. JE, January 1, 2005: Cash 42,693,400 Premium on bonds payable 2,693,400 Bonds payable 40,000,000 3. JE, June 30, 2005: Bond interest expense 1,707,736 Premium on bonds payable 292,264 Cash 2,000,000 $42,693,400 x 8% x ½ = $1,707,736 $40,000,000 x 10% x ½ = $2,000,000 JE, Dec. 31, 2005: Bond interest expense 1,696,045 Premium on bonds payable 303,955 Cash 2,000,000 ($42,693,400 - $292,264) x 8% x ½ = $1,696,045 4. Excerpt from Jessie’s balance sheet, December 31, 2006 Long-term debt Bonds payable, 10%, due Dec. 31, 2009 $40,000,000 plus premium on bonds payable 2,097,181 Book value $42,097,181 Unamortized bond premium = $2,693,400 – $292,264 – $303,955 = $2,097,181
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Question 3 (20 marks) Part A – 10 marks (a) July 6
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This note was uploaded on 08/19/2008 for the course COMM 217 taught by Professor Smroz during the Summer '07 term at Concordia Canada.

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Solution-Final-W07 - Solution of the final exam COMM 217...

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