A sinking fund can be set up in one of two ways:● The corporation makes annual payments to the trustee, who invests the proceeds insecurities (frequently government bonds) and uses the accumulated total to retire thebond issue at maturity.● The trustee uses the annual payments to retire a portion of the issue each year, callinga given percentage of the issue by a lottery and paying a specified price per bondor buying bonds on the open market, whichever is cheaper.What are the advantages and disadvantages of each procedure from the viewpoint of thefirm and the bondholders?

Q: Suppose your local government decide to tax the interest income on its own bonds as part of an…

A: Interest income is defined as the amount or income which is paid to the entity for lending the money…

Q: A company sold $250,000 bonds and set up a sinking fund that was earning 8% compounded semi-annually…

A: Sinking fund refers to a fund started by the company which saves or set aside some fund or money…

Q: atement correctly describes a feature of a charitable split-interest trust?   A)A grantor who…

A: Charitable split-interest trust refers to the form of trust that has the characteristics of both…

Q: General tax revenues RO 250,000, were paid to the fund to be used to pay principal and interest on…

A: Journal entry is the first step in maintaining books of account of the entity. Journal entry records…

Q: Client transacted on May 9, 2012, Wednesday, to participate in the Peso Fixed Income Fund after…

A: Client transaction = May 9, 2012 May 9, 2012 NAV = 215.391634 May 10, 2012 NAV = 215.337169

Q: The majority of mutual fund assets are now own Select one: O a. fiduciaries. O b. business…

A: Introduction : In simple words, mutual fund is a type of financial intermediaries, who collects…

Q: An entity's retirement benefit plan provides for an annual contribution of P2,000,000 to a fund held…

A: Employees contribute towards the separate fund which has been created for the retirement of the…

Q: Which market allows corporations and governments to raise funds by issuing shares of stock and bonds…

A: The primary market is also known as the new issues market. It deals with new security is being…

Q: Qasim as CEO is powered by the directors to source the funds through the issues of debentures.…

A: Note: As per our guidelines, we can only answer one question at once. Since, you haven't mentioned…

Q: E.) Is a contractual financial product sold by financial institutions that is designed to accept and…

A: Financial Institution: Financial institutions refers to the business that provides a marketplace for…

Q: Bond sinking fund, January 1, 2021    10,000,000 Additional investment in 2021             2,200,000…

A: Bond sinking fund Bond sinking fund refers to that fund in which money is kept aside to pay off debt…

Q: A college received a contribution to its endowment fund of $2 million. It can never touch the…

A: Formula: Amount earned = Endowment fund*Interest rate

Q: Which of the following statement is incorrect?

A: The retirement of long term debt calls means that the debt represented by the bond are paid by the…

Q: Which of the following can be described as involving direct finance? A. People buy shares in a…

A: Direct finance does not involve any intermediate party or a third party. There is a direct…

Q: city has $2.5 million worth of school bonds that are due in 20 years and has established a sinking…

A: Future Value is the value of current investments at a certain future date at the assumed…

Q: IIS IS Lohrmann and his wife, Suzanne Lohrmann, are planning for retiremen want to compare the past…

A: In this we have to get five year return.

Q: A corporation decides to sell its newly issued bonds to pension funds and insurance companies, what…

A: A corporate bond is a debt instrument that a company issues and sells to investors. The company…

Q: In the notes to its December 31, 1996, balance sheet, how should Witt report the above data? a. No…

A: The answer are as follows

Q: Which of the following is Considered Cash?   Pension Fund Sinking Fund "Bond Attached is 2 year…

A: Solution:   Petty cash fund is cash for small day to day routine expenses.

Q: Which of the following can be described as involving direct finance? O A. People buy shares in a…

A: Borrowers borrow funds directly from the financial market without the need of a third-party service…

Q: A government issues 10,000,00 of demand bonds and fails to obtain an acceptable takeout agreement…

A: Take-out Agreement: A take-out commitment, also known as a take-out loan or a take-out agreement,…

Q: hat is the required amount of the annual deposit?

A: Information Provided: Disbursements = 50,000 (Dec 31 1991) Disbursements = 100,000 (Dec 31 1992)…

Q: Calculate Source of Fund, Net assets from the information given below: Particulars OMR Particulars…

A: For an organization and a company there are mainly two types of fund sources are available equity…

Q: Which one of the following is a correct statement about the nontax characteristics of a pooled…

A: Pooled income fund is a kind of charitable trust. It is basically a mutual fund that contains gifts…

Q: Interest payments on federal government bonds which are owned by the central bank 1, are recorded…

A: Interest payment is made by the issuer of securities to the buyer of securities in the consideration…

Q: In Growth and Income Mutual Fund the companies make investment of their funds in a. Already proven…

A: Mutual funds can be of various types growth ,Income, Money market etc

Q: The trust for APA, Inc. prepares a statement of affairs which shows that unsecured creditors whose…

A: Employees are treated as priority creditors and need to be paid before any payment is made to…

Q: Which of the following is an example of an direct transfers?   A holding company distributes its…

A: Direct transfers means transfer of any amount / security / assets directly by one entity  / person…

Q: A corporation will make the following disbursements: a. Php 50, 000 on December 31, 1991 b. Php…

A: Let's first figure out the present value of all withdrawals as of 1-Jan-1986. Then we will compute…

Q: Dambrossio Investments is an entity in the mutual funds industry, which provides a group of mutual…

A: Planning materiality is the maximum value set by the auditor for the misstatements. These are set to…

Q: The XYZ Trust has two income beneficiaries. The trust can distribute any amount of accounting income…

A: Accounting income formula  Taxable interest income + Tax exempt interest income

Q: poration will make the following disbursements: 50,000.00 on December 31, 2001 100,000.00 on…

A: The value of the payment obligations at the end of year 1996 can be calculated as follows :…

Q: onclusion

A: A mutual fund refers to the investment which pooled money from many investors for the purpose of…

Q: The following information is based on an actual annual report. Different names and years are being…

A: Given  B and its subsidiaries provide some other post-retirement benefits (OPEB) The eligibility of…

Q: State law may required that capital stock have which of the following values? a. computer software…

A: Capital stock is stock that includes common stock and preferred stock and is authorized and issued…

Q: When a corporation invests borrowed money in assets that generate profits greater than the after-tax…

A: Debts are considered a financial instrument used to raise finance for the organization. It is also…

Q: Evaluate whether using the cash raised by the rights issue to buy back bonds is likely to be…

A: The answer for the question on using the cash raised by the rights issue to buy back bonds is…

Q: The Vancouver Development Company (VDC) is planning to sell a$100 million, 10-year, 12%, semiannual…

A: Sinking fund refers to a part of a bond indenture or preferred stock charter which requires the…

Q: A simple trust has the following receipts and expenditures for the current year.  The trust…

A: Taxable income is the total of all incomes earned by the taxpayer during the relevant year. Tax…

Q: A utility district has issued bonds totaling $4.7 Million with a fixed annual coupon rate of 4.00%…

A: Amount required for coupon payment is Face value*Coupon rate And amount required to deposit is…

Q: mutual

A: Mutual funds are funds that are collected from pool of investors in order to make investments in…

Q: Not-for-profit organizations should report investments in debt securities at which of the following…

A: A debt security is an investment in bonds which is issued by the government or relevant organisation…

Q: Which of the following statements is false? Unmatured principal installments and accrued…

A: Liabilities should be reported when the transaction resulted in the amount that needs to be paid in…

Characteristics of Bonds