Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 6, Problem 15C
Evaluating Legal Debt Margins. (LO6-2) You’ll be moving to a nearby state after graduation and are focusing on two cities near your new job. After reading this chapter, you decide to look at the debt held by each of the governments. Disclosures of the legal debt margin for each city over the past few years are reproduced below.
Five-year trend information:
Five-year trend information:
Required
Compare the legal debt margin of the two cities. What are your observations regarding the debt position of the two governments?
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PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULAS1.- Simple interest on a loan. A Financiera Popular recently opened in the city, to which Ms. Maru Villegas applied for a $253,700.00 unsecured loan, signing the promissory note on March 8 with maturity in 180 days. The stipulated interest rate is 11.5%. In order not to make a mistake, she takes into consideration the simple interest rate and a year of 360 days. What is the amount of interest calculated for Maru?
Note:In the image, this is the original exercise, it is in Spanish, but it is easy to understand.
Very important Note:It is necessary that you make a solution approach and then the result. Above all, to check the procedure and/or the formulas used, especially when you use excel.
TO CONSIDER THE YEAR AS 360 DAYS (WHICH IS COMMERCIAL)
You have just been hired as a loan officer at a national bank. Your first assignment is to calculate the amount of the periodic payment (in $) required to amortize (pay off) the following loan being considered by the bank (use Table 12-2). (Round your answer to the nearest cent.)
LoanPayment
PaymentPeriod
Term ofLoan (years)
NominalRate (%)
Present Value(Amount of Loan)
$
every year
12
6
$40,000
Your supervisor has tasked you with evaluating several loans related to a new expansion project. Using the PVIFA table (table 9.4 in the textbook), determine the annual payment on a $365,900, 7% business loan from a commercial bank that is to be amortized over a five-year period. Show your work. Does this payment seem reasonable? Explain.
Chapter 6 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 6 - Prob. 1QCh. 6 - What disclosures about long-term liabilities are...Ch. 6 - Prob. 3QCh. 6 - Prob. 4QCh. 6 - Although the most common type of general long-term...Ch. 6 - What is overlapping debt? Why would a citizen care...Ch. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - How are debt issuance costs accounted for at the...Ch. 6 - Under what circumstances might a government...
Ch. 6 - Prob. 11CCh. 6 - A citizens group in your state has placed an...Ch. 6 - A county government and a legally separate...Ch. 6 - Prob. 14CCh. 6 - Evaluating Legal Debt Margins. (LO6-2) Youll be...Ch. 6 - Prob. 17.1EPCh. 6 - Proceeds from bonds issued to construct a new city...Ch. 6 - The liability for long-term debt issued to finance...Ch. 6 - Which one of the following statements regarding...Ch. 6 - Prob. 17.5EPCh. 6 - On March 2, 2020, 20-year, 6 percent, general...Ch. 6 - Prob. 17.7EPCh. 6 - Prob. 17.8EPCh. 6 - The liability for special assessment bonds for...Ch. 6 - Total general long-term indebtedness subject to...Ch. 6 - Payment of general obligation bond interest would...Ch. 6 - Debt issuance costs a. Include legal and...Ch. 6 - If bonds are sold at a premium: a. The premium is...Ch. 6 - Prob. 17.14EPCh. 6 - Prob. 17.15EPCh. 6 - Prob. 18EPCh. 6 - Budgeted and Actual Debt Service Transactions....Ch. 6 - Lease Agreement. (LO6-5) McCormick County agreed...Ch. 6 - Legal Debt Margin and Direct and Overlapping Debt....Ch. 6 - Debt Service Fund Trial Balance. (LO6-5) Following...Ch. 6 - Prob. 23EPCh. 6 - Term Bond Debt Service Fund Transactions. (LO6-5)...Ch. 6 - Prob. 25EP
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