HW2: ABC Co. acquired the $100,000, 6% bonds on 2001/12/31. Market price of the bonds: $102,723 (including brokerage fee of $153). Effective interest rate is 5%. Bond interests are payable on 12/31. ABC attempts to collect the cash flows and sell. It prepares the following bond amortization schedule. ABC sold the bonds on 2004/9/30. Prepare related journal entries for each period. Periods Cash Interest Revenue Premium Amortization Carrying Value
2001/12/31 102,723
2002/12/31 6,000 5,136 864 101,859
2003/12/31 6,000 5,093 907 100,952
2004/12/31 6,000 5,048 952 100,000

The fair market value of the bonds are as follows:
Periods Fair Market Value
2002/12/31 104,200
2003/12/31 103,000
2004/9/30 105,500

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer; the landlord can sue the renter,and the renter loses the security deposit;

answertaxable income;