Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. zidane company issues a one-year interest-bearing

Zidane Company issues a one-year interest-bearing note in return for inventory purchased from Capello Company....

60.1K

Verified Solution

Question

Accounting

Zidane Company issues a one-year interest-bearing note in return for inventory purchased from Capello Company. The note has stated rate of 9% and face value of $1,840,000. Interest is paid in every 3 months. After the third interest payment is made, Zidane and Capello agree to settle the note. Zidane gives Capello securities with a fair value of $1,816,000 for the settlement. The carrying value of the securities is equal to their fair value. Remaining total interest expense until maturity was $48,000 on the day of settlement. Ignoring income taxes, what is the effect of this settlement on Zidanes stockholders equity?

Multiple Choice

  • Decrease of $24,000

  • No effect

  • Increase of $10,800

  • Increase of $24,000

  • Increase of $17,400

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Chapter 11 - Exercise 03 Kyle Godwin is interested in buying a 24-foot pontoon boat for $11,850....

Finance
Q

4 Part 2 of 3 3 points eBook Hint Print References the current assets section...

Basic Math
Q

xx is equivalent to which of the following choices O None of the choices are...

Algebra
Q

Exercise 9-7 (Algo) Flexible Budgets and Activity Variances [LO9-1, LO9-2] Jake's...

Accounting
Q

Determine the times interest earned. Round to one decimal place

Accounting
Q

Match each capital budgeting method with its definition METHODS 1. Accounting rate of retum 2....

Accounting
Q

The net income reported on the income statement for the current year was $106,800. Depreciation...

Accounting
Q

Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all...

Accounting
Q

Evaluate the required value based on the given standard notation by using the cash flow...

Accounting
Q

QS 10.13 (Algo) Bond retirement by call option LO P4 On July 1, Aloha Company...

Accounting
Q

What is the Present Value of $650 received for the next four years and $3,000...

Finance
Q

On July 1, 2013, Robert forms the Yew Corporation. In exchange for 100 percent of...

Accounting