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GH issued a 6% debenture for $1,000,000 on 1 January 20X4. A broker fee of $50,000 was payable in respect of this issue. The effective interest rate associated with this debt instrument is 7.2%.
The carrying value of the debenture at 31 December 20X4 is:
Suggested Answer: A, B, C, D
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38 comments · newest first
QU
Quiana
11 months ago
$961,400? Really? That seems low for a debenture!
PA
Patti
11 months ago
Definitely not B, that seems way too high.
RO
Roy
12 months ago
Wait, how does the effective interest rate affect this?
NA
Nana
12 months ago
I think it's option D, seems right to me!
BU
Bulah
12 months ago
The broker fee reduces the initial carrying value.
JE
Jerrod
1 year ago
I think the carrying value should be lower than the face value due to the broker fee, but I can't remember if we also need to account for interest payments in this calculation.
GE
Georgene
1 year ago
I feel a bit confused about how the effective interest rate affects the carrying value over time. Does it mean we need to adjust the carrying value each year?
MA
Maryln
1 year ago
This question reminds me of a similar practice problem we did in class. I think we need to subtract the broker fee from the initial amount to find the carrying value.
JE
Jessenia
1 year ago
I remember we discussed how to calculate the carrying value by considering the effective interest rate and the broker fee, but I'm not sure about the exact formula.
LA
Lavonna
1 year ago
No problem, I've got this. The key is to use the effective interest rate of 7.2% to determine the carrying value at the end of the year. I'm confident I can work through this calculation and arrive at the right answer.
DA
Dana
1 year ago
I'm a bit confused on how to calculate the carrying value here. Do I need to use the effective interest rate or the stated interest rate? I'll have to review my notes to make sure I'm approaching this correctly.
JO
Joseph
1 year ago
Okay, let me think this through step-by-step. The debenture was issued at a discount due to the broker fee, so I'll need to use the effective interest rate to determine the carrying value.
JE
Jesse
1 year ago
Hmm, this looks like a question on amortized cost accounting for debt instruments. I'll need to carefully calculate the effective interest rate and the carrying value at the end of the year.
MA
Maryann
1 year ago
I'm a bit confused by the package structure here. I'll need to double-check my understanding of how packages and class accessibility work in Java.
CA
Caitlin
1 year ago
I'm pretty sure it's SHIFT + U, that's the standard unread shortcut for most email clients.
CR
Craig
1 year ago
Hmm, I'm a bit unsure about this one. The options seem to cover different aspects of integration challenges, but I'm not sure which one the Oracle Service Bus specifically addresses.
FI
Filiberto
1 year ago
This looks like a pretty straightforward question about creating a relationship for RLS. I think I can handle this one.
LA
Laura
1 year ago
I'm pretty sure I know the answer, but I'm going to double-check my work just to be sure.
NG
Ngoc
1 year ago
Ha! This question is a real brain-teaser. I bet the answer will surprise me.
LA
Lakeesha
1 year ago
D) $961,400
BE
Bettina
1 year ago
C) $1,012,000
JE
Jesusita
1 year ago
B) $1,065,600
JU
Judy
1 year ago
A) $958,400
CH
Chaya
1 year ago
Okay, let me try to work this out step-by-step. The effective interest rate is 7.2%, so I need to use that to calculate the carrying value.
SH
Shawnda
1 year ago
C) $1,012,000
TH
Thomasena
1 year ago
B) $1,065,600
CA
Casie
1 year ago
A) $958,400
AN
Anthony
2 years ago
Wow, this question is tricky! I'm not sure if I can figure out the carrying value based on the given information.
SH
Shantell
1 year ago
A) $958,400
KA
Kanisha
1 year ago
I'm leaning towards C) $1,012,000 because of the effective interest rate.
SH
Shalon
1 year ago
C) $1,012,000
MA
Marg
1 year ago
I'm not sure about that, I think it's A) $958,400.
LA
Lavonna
1 year ago
B) $1,065,600
AM
Amie
1 year ago
I think it's A) $958,400 because the broker fee is deducted from the principal amount.
DE
Desire
1 year ago
A) $958,400
MA
Marnie
2 years ago
That's a good point, I didn't consider the broker fee. You might be right.
GA
Gabriele
2 years ago
I disagree, I believe the answer is B) $1,065,600 because the broker fee should be added to the principal amount.
MA
Marnie
2 years ago
I think the answer is A) $958,400 because the effective interest rate is lower than the coupon rate.