Text 1: Shark Co. sold a $10,000, 8%, 5-year bond for $10,853 yield 6%. Interest is paid semi-annually. The first interest payment entry will record interest payable of $300.00$434.12$400.00$325.59
Text 2: A machine that cost $40,000 and had accumulated depreciation of $ 30,000 was traded in on a new machine, which had an estimated 20-year life and a cash price of $50,000. If a $7,000 trade-in allowance was received on the old machine, the new machine should be valued at:$10,000$50,000$40,000$47,000
Explanation:
Text 1:
- The bond was sold for $10,853, not $10,000, and it has a yield of 6%.
- The interest payment entry will record interest payable of an amount that is not specified in the text.
Text 2:
- The machine that was traded in had a cost of $40,000, not $30,000.
- The accumulated depreciation on the old machine is given as $30,000.
- The new machine has a cash price of $50,000.
- A trade-in allowance of $7,000 was received on the old machine.
- The value of the new machine is not specified in the text.
Please note that the errors have been identified but not corrected.