1(a). Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1.1(b). Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1.1(c). Prepare journal entries to record the maturity of the bonds on December 31, Year 3.2. Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of hercompany. Which of the following ways to raise money would we recommend?3. Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make requiredcash payments when cash flows are low. Which of the following ways to raise money would we recommend?Complete this question by entering your answers in the tabs below.Required 1A Required 1B Required 1C Required 2Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1.View transaction list View journal entry worksheetNo1DateJan 01Required 3General JournalCashDiscount on bonds payableBonds payableRequired 1ARequired 1B>Debit88,00012,000Credit100,000 The founder of Frenza asks us to assist her in accounting and analysis of the corporation's bonds, which have an annual contract rateof 8%. She wants to know the business and accounting implications of further debt issuances as she looks for ways to finance thegrowth of Frenza. The following Tableau Dashboard is provided to help us address her questions and provide recommendations forher business decisions.$100,000$80,000$60,000$40,000$20,000$0Frenza Bond AmortizationCarrying ValueUnamortized DiscountJanuary 1, Year June 30, Year 1 December 31, June 30, Year 2 December 31, June 30, Year 3 December 31,1Year 1Year 2Year 3Cash & Inventory forCompeting CompaniesMarket Rate for CompanyBonds

The journal entry at the time of the issuance of bonds is made in the books of company on journal…

1(a). Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1. 1(b). Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1. 1(c). Prepare journal entries to record the maturity of the bonds on December 31, Year 3. 2. Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? 3. Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend?

1(a). Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1. 1(b). Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1. 1(c). Prepare journal entries to record the maturity of the bonds on December 31, Year 3. 2. Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? 3. Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend?

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter1: Starting A Proprietorship: Changes That Affect The Accounting Equation

Section: Chapter Questions

Problem 1ANFS

See similar textbooks

Similar questions

Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2022, for Business Solutions follow. Total assets $120,568 Total liabilities $872 Total equity $119,696 Required: 1. The bank has offered a long-term secured note to Business Solutions. The bank's loan procedures require that a client's debt-to- equity ratio not exceed 0.83. As of March 31, 2022, what is the maximum amount that Business Solutions could borrow from this bank? (Round your intermediate calculations to the nearest dollar amount.) 2. Assume Business Solutions borrows the maximum amount allowed from the bank. (Round your intermediate dollar values to the nearest whole number and final answers to 1 decimal place.) (a) What percentage of assets would be financed by debt? (b) What percentage of assets would be financed by equity? 1. Maximum amount 2. (a) Percentage of assets financed by debt % 2. (b)…
Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2022, for Business Solutions follow. Total assets $121,568 Total liabilities $862 Total equity $120,706 Required:1. The bank has offered a long-term secured note to Business Solutions. The bank’s loan procedures require that a client’s debt-to-equity ratio not exceed 0.77. As of March 31, 2022, what is the maximum amount that Business Solutions could borrow from this bank? (Round your intermediate calculations to the nearest dollar amount.)2. Assume Business Solutions borrows the maximum amount allowed from the bank. (Round your intermediate dollar values to the nearest whole number and final answers to 1 decimal place.)(a) What percentage of assets would be financed by debt?(b) What percentage of assets would be financed by equity?
You have received $1,000,000 from an insurance policy that matured. You would like to invest some of that money in either Sagicor investments or Accesss limited- two companies that you believe are doing well financially. You decided to analyze the financial statements of the companies to help you decide which one is performing better. You discovered the following Sagicor Access Current ratio 3:1 2:3:1 Quick ratio 1:5:1 1:1:2 Debtor collection period 35 days 30 days Creditors payment period 40 days 25 days Inventory turnover 8 times 9 times Net income percentage 15% 11% Prepare a report comparing the performance of the companies and determine which one is better to invest.
Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2022, for Business Solutions follow. Total assets $120,268 Total liabilities $875 Total equity $119,393 The bank has offered a long-term secured note to Business Solutions. The bank’s loan procedures require that a client’s debt-to-equity ratio not exceed 0.8. As of March 31, 2022, what is the maximum amount that Business Solutions could borrow from this bank? Assume Business Solutions borrows the maximum amount allowed from the bank. What percentage of assets would be financed by debt? What percentage of assets would be financed by equity?
DO IT IN EXCEL AND SHOW FORMULAS DO IT IN EXCEL AND SHOW FORMULAS Jorge Del Llano, a start-up merchant, needs $360,000.00 liquid to invest in inventory and pay certain start-up expenses for his business. The Bank has investigated him and considers him eligible for credit. The Bank authorizes an unsecured credit facility, subject to the provision of a line of credit appropriate to your needs, charging 18% interest for a term of 60 days. The origination fee is 1.25%. For what amount was the loan signed for Del Llano to receive the $360,000 free of charge?
As an analyst for a big technology company. The company has decided that this is the time to retire some of its debt. The company has decided the best way to do this is if us government bonds are used to match the principle as well as the interest payments on the liabilities chosen. Set up a strategy to accomplish this showing your work and discussion your result. do you think this process is reasonable and why/whynot? September 2019 $4,500,000 September 2020. $5,050,000 September 2021. $3,750,000 September 2022 $6,450,000 The Government debt 1.50% coupon due September 2019 1.75% coupon due September 2020 2.35% coupon due September 2020 2.6% coupon due September 2021
You are evaluating the balance sheet for Goodman bees corporation from the balance sheet you find the following balances cash and marketable securities equal $400,000, account receivable equals $1,200,000, Inventory equals $2,100,000 acured wages and taxes $500,000 accounts payable $800,000 notes payable $600,000 calculate goodman bees networking capital. answer in dollars not millions round your answer to the nearest dollar amount networking capital
Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2020, for Business Solutions follow. Total assets . $120,268 Total liabilities . $875 Total equity $119,393 Required 1. The bank has offered a long-term secured note to Business Solutions. The bank’s loan procedures require that a client’s debt-to-equity ratio not exceed 0.8. As of March 31, 2020, what is the maximum amount that Business Solutions could borrow from this bank? 2. If Business Solutions borrows the maximum amount allowed from the bank, what percentage of assets would be financed (a) by debt and (b) by equity? 3. What are some factors Santana Rey should consider before borrowing the funds?
Case Study You have applied for a public relations (PR) position with a RM 10.2 million savings and loan association, a conservative financial institution that has been in existence for over 50 years. The organization has never employed a PR person before. Now that its assets have risen above 10 million, however, the president of the institution feels it is time to hire someone to ‘do the PR’. During an interview, the president admits he is not sure what PR is, but he is fairly sure he wants the person he hires to plan promotions and stage events that will attract new customers, write stories that will get free space and time in the local media and start an employee publication. The president also states that he is open to suggestions about the position and asks you to explain how you would establish a professional, effective PR program if you were hired.
Balance Sheet You are evaluating the balance sheet for Cypress Corporation. From the balance sheet you find the following balances: Cash and marketable securities = $670,000, Accounts receivable = $870,000, Inventory = $570,000, Accrued wages and taxes = $111,000, Accounts payable = $207,000, and Notes payable = $1,070,000. What is Cypress's net working capital? Multiple Choice $1,388,000 O $2,110,000 $722,000 O $3,498,000
A DI has the following balance sheet (in millions). Assets: Cash=9$ ; Loans=95 ; Securities= 26; total assets=130 Liabilities and equity: deposits= 75; purchased funds= 40; equity=15 ; total liabilites and equity= 130 The DI’s securities portfolio includes $16 million in T-bills and $10 million in GNMA securities. The DI has a $20 million line of credit to borrow in the repo market and $5 million in excess cash reserves (above reserve requirements) with the Fed. The DI currently has borrowed $22 million in Fed funds and $18 million from the Fed discount window to meet seasonal demands. 1) What is the DI’s total available (sources of) liquidity? 2) What is the DI’s current total uses of liquidity? 3) What is the net liquidity of the DI? 4) Calculate the financing gap. 5) What is the financing requirement? 6) The DI expects a net deposit drain of $20 million. Show the DI's balance sheet if the following conditions occur: a. The DI purchases liabilities to offset this expected drain. b.…
Clayton Industries has the following account balances: Current assets Noncurrent assets The company wishes to raise $45,000 in cash and is considering two financing options: Clayton can sell $45,000 of bonds payable, or it can issue additional common stock for $45,000. To help in the decision process, Clayton's management wants to determine the effects of each alternative on its current ratio and debt-to-assets ratio. Required a-1. Compute the current ratio for Clayton's management. Note: Round your answers to 2 decimal places. Currently If bonds are issued If stock is issued $ 22,000 Current liabilities 77,880 Noncurrent liabilities stockholders' equity Currently If bonds are issued If stock is issued Current Ratio 2.44 to 1 a-2. Compute the debt-to-assets ratio for Clayton's management. Note: Round your answers to 1 decimal place. Bonds Stock to 1 to 1 Debt to Assets Ratio Additional Retained Earnings $ 9,000 50,000 48,888 % % % b. Assume that after the funds are invested, EBIT…