Four companies have each issued $6 million in bonds. Which company will have the lowest balance in a contra account, without having a zero balance, assuming this is the first bond issuance for all four companies

Answers

Answer 1

The company with the lowest balance in a contra account (Bonds Discounts) is A Company 2, which sold their bonds at 94.

Data and Calculations:

                                             Co. 1              Co. 2            Co. 3        Co. 4

Face value of bonds   $6,000,000  $6,000,000 $6,000,000  $6,000,000

Selling rate                            99              94               101                105

Proceeds from bonds $5,940,000  $5,640,000  $6,060,000  $6,300,000

Premium / (Discounts)  ($60,000)   ($360,000)      $60,000     $300,000

Company 1's balance in the contra account (Bonds Discounts) is $60,000, Company 3's is $60,000 (Bonds Premium), while Company 4's balance is $300,000 (Bonds Premium).

Thus, the company with the lowest balance in a contra account is A.

Options:

A. Company 2, which sold their bonds at 94  

B. Company 4, which sold their bonds at 105  

C. Company 1, which sold their bonds at 99  

D. Company 3, which sold their bonds at 101

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What is the best way to protect your credit?

Freeze your record at each of the four credit bureaus—Equifax, Experian, TransUnion, and Innovis—for optimum protection. The websites of each bureau are where you may accomplish this. Your report can be frozen for free and then unfrozen at any moment, for example, to submit an application for a new loan. Prior to approving a new mortgage, auto loan, or credit card, the majority of lenders review your credit record.

The ability to view this report is restricted by a freeze, making it more difficult for identity thieves to create new credit accounts in your name. Once you've opened a Social Security account, make sure to freeze your report. Fraud may be the cause of a rapid drop in your credit score. It's crucial to monitor this quantity because of this.

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