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Unformatted text preview: In-Class Activity #1 (30 points)List the two members of todays activity__________________________________________________________________Question 1 Present values (10 points)A $100,000 bond is issued on January 1, 2007 (face value=100,000) that is due on January 1, 2012, with coupon payments of $6,000 each July 1 and January 1. Investors require an annual effective interest rate of 10 percent (5% for each 6-month period). What is the present value of the bond on January 1, 2007?PV$ 107,721 Coupon pmt6000.00Face Value100000.00n10.00i0.05lump sum multiplier0.61391annuity multiplier7.72173Question 2 (8 points)On April 1, the corporation borrowed $65,000 from the bank by signing a $70,000 zero-interest bearing note due one year from April 1. The companys fiscal year end is December 31. Assume straight-line amortization of discount. Prepare the entry on April 1 and the adjusting entry on December 31. Cash65,000Discount on NP5,000Notes payable70,000Interest Expense3,750=5000*9/12Discount on NP3,750Question 3 (12 points)Below is a partial list of employees and their payroll data for August.EmployeeEarnings to July 31Weekly PayMark Hamill$ 4,200 $ 150 Carrie Fisher$ 5,600 $ 200 Harrison Ford$ 42,000 $ 1,500 Alec Guinness$ 112,000 $ 4,000 Assume: Federal income tax withheld is 12% of wages. Union Dues withheld are 3% of wages. The state unemployment tax rate is 2% and the federal is 0.8%, both on a $7,000 maximum. The FICA rate is 7.65% on employee and employer on a maximum of $90,000 per employee. In FICA rate is 7....
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- Fall '08