On january 1,2018, the chaucer’s restaurant decides to invest in lake turner bonds. the bonds mature on december 31,2023, and pay interest on june 30 and december 31 at 4% annually. the market rate of interest was 4% on january 1, 2018 so the 90,000 maturity value bonds sold for face value. chaucer intends to hold the bonds until december 31,2023.
1. journalize the tractions related to chaucer’s investment in lake turner bonds during 2018.
2. in what category would chaucer report the investment on december 31, 2018, balance sheet.

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?