on november 1, alan company signed a 120-day, 8% note payable, with a face value of $9,000. alan made a december 31 year-end accrual for interest earned. what is the journal entry as of march 1 to record the payment of the note? (use 360 days a year.)

Answers

Answer 1

Credit Cash $9,240; debit Notes Payable $9,000; debit Interest Payable $120; debit Interest Expense $120.

What occurs when notes payable are debited?

Debit your Cash account for the amount of cash received and credit your Notes Payable account for the liability if your business borrows money under a note payable. Your Notes Payable account will be debited and your Cash account credited after you return the loan.

A note payable is it a credit or a debit?

The corporation credits the cash account, which it records as a liability on the balance sheet, and debits notes payable when repaying a loan. The corporation then takes into account the loan's interest rate.

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Related Questions

one of the first things a property manager does when a property management agreement is signed is develop

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One of the first things a property manager does when a property management agreement is signed is develop a Property Management Plan.

What is a Property Management Plan?

A property management plan is a document that outlines how a property will be managed, maintained, and utilized. It is typically written to protect and enhance the value of a particular property. The plan includes goals and objectives, as well as strategies and tactics for achieving them. It also includes a budget and timeline for implementation. Property management plans are used by landlords, property managers, and real estate investors to ensure that their investments are well-maintained and profitable.

This plan helps to provide clarity and direction to both the property managers and the property owners, helping to ensure that all parties are on the same page and that the property is managed in a way that is consistent with the goals and objectives of the owner.

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hat industry characteristics would lead you to expect the cournot model or the bertrand model to be good approximations to the nature of competition in that industry?

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The Cournot model of oligopoly tends to assume that rival firms produce a similar product and compete to maximize profits by deciding how much to produce.

What is cournot model ?The Cournot model of oligopoly assumes that rival firms produce a similar product and compete to maximize profits by deciding how much to produce. All firms select output (quantity) at the same time. The basic Cournot assumption is that each firm chooses its quantity, taking the quantity of its competitors as given.Cournot duopoly, also known as Cournot competition, is an imperfect competition model in which two firms with identical cost functions compete in a static setting with homogeneous products.The Cournot model is simpler than the Oligopoly model, but they share the same foundations, so businesses are interdependent.In a cournot model, the firms compete for output. There is more than one firm in this type of market condition, and all firms in a market produce homogeneous products rather than differentiated products.

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______accounts used to accumulate information until it is transferred to the owner’s capital account.

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Answer:

In a business context, an account is a record of financial transactions. Some common types of accounts include revenue accounts, which are used to record income from sales or other sources; expense accounts, which are used to record the costs associated with operating the business; and asset accounts, which are used to record the value of the business's tangible and intangible assets. These accounts are typically used to create financial statements, such as the income statement and balance sheet, which provide information about the financial health of the business.

Explanation:

the city of medford purchased a fire truck for the fire department. if the operations of the fire department are financed by general revenues, an asset would be recorded in which journal(s)?

Answers

The city of Medford purchased a fire truck for the fire department. if the operations of the fire department are financed by general revenues, an asset would be recorded in which journal General fund or governmental fund.

Government funds mean cash or in-kind grants or land allocated at preferential rates by the government, federal government, other state governments, and local governments, and saved by tax breaks or reduced utility bills specific to the charity. Or includes subsidies saved. won.

These funds account for most of the City's tax-funded activities. Reporting on government funding is often budget-focused. Government funds are classified into five types of funds: General Funds, Special Income, Capital Projects, Debt Service, and Permanent Funds.

There are three types of Central Government funds: Indian Consolidated Fund (Section 266), Indian Reserve Fund (Section 267) and Indian Public Accounts (Section 266).

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why did so many americans - over 50 percent of american families - invest in stocks in the late 1990s?

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The percentage of Americans that own stock hasn't changed much over the past decade.

What has been the average return for the stock market over the past 50 years?The stock market has returned an average of 10% per year over the past 50 years. The past decade has been great for stocks. From 2012 through 2021, the average stock market return was 14.8% annually for the S&P 500 index (SNPINDEX: ^GSPC).The number of poor neighbourhoods decreased by 25 percent. This was due to the good economy and suburbanization help from the government. The increase of suburbanization helps decrease poverty in inner cities but little effect in concentrated neighbourhoods. The affect of surburbs becoming more economically diverse helped decrease poverty neighbourhoods. The poverty statistics showed that less fortunate neighbourhoods were based on racial categorization.Longer life expectancy, large generations entering retirement, and reduced birth rate were the causes of an increasing number of elderly. Issues of this included a shortage in workers, loss of tax revenue, large payouts from Social Security, lack of health care coverage for the aging population, and concerns over care for the aging population.

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consider the demand for cereal. when price is $4.25/box quantity demanded is 1200 boxes. price increased to $5.25/box and quantity demanded fell to 1000 boxes. what is the elasticity of demand?

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Demand is considered to be relatively inelastic, or not highly responsive to price changes, if the quantity demanded is smaller than the percent change in price.

What does demand look like?

Key Learnings. According to the economic principle known as the law of demand, customer demand for just a good increases when prices are low and decreases when prices are high. When shoppers rush to purchase goods at steep prices during Black Friday bargains, the law of demand is in effect.

Is a demand a request?

It might be simple—and tempting—to employ demands rather than requests, even if you believe you comprehend the distinction on an intellectual level. A request is when you formally, politely, or respectfully ask for something. A call is a strong declaration in which you request something.

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for projects of other-than-average riskiness, the discount rate assigned to that project should be based on:

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The firm's total weighted average cost of capital should be the foundation upon which the discount rate for projects with above-average riskiness is determined.

Does the discount rate correspond to the capital cost?

The discount rate is the rate used to discount future cash flows from an investment to the present value in order to assess whether an investment will be successful, whereas the cost of capital refers to the minimal rate of return required from an investment to make it worthwhile.

WACC is used as a discount rate; why?

When a company wishes to earn as much cash flows as it is paying investors for their capital, the WACC is employed as a discount rate.

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one-year rate in japan is 4% and one-year rate in the u.s. is 2%. the current exchange rate is 110 yen per dollar. if you can enter into a forward exchange rate of 120 yen per dollar, what would be your arbitrage profit per 100 units of the borrowed currency? assume that you can borrow and lend at the given interest rates.

Answers

Your arbitrage profit per 100 units of the borrowed currency makes a riskless profit of 0.02 dollars.

The first thing to do is figure out what the correct forward rate should be.

The forward rate should be (110×1.04)/1.02 = 112.15 yen/dollar.

Thus you want to exchange yen for dollars at 110 rather than the implied 112.15.

If you start with no money then you need to borrow 1 dollar at 2% exchange them into 110 yen and invest the yen at 4%.

The yen will grow to be 110×1.04 = 114.4

so you enter into a forward exchange agreement to exchange

114.4 yen into dollars at an exchange rate of 110.

This will yield 1.04 dollars.

You need to repay your dollar borrowing which will cost 1.02 dollars.

Thus you make a riskless profit of 0.02 dollars.

In economics and finance, arbitrage is the exercise of taking benefit of a distinction in fees in two or greater markets; placing an aggregate of matching offers to capitalize on the difference, the profit being the distinction among the market expenses at which the unit is traded.

Whilst used by lecturers, an arbitrage is a transaction that includes no bad cash going with the flow at any probabilistic or temporal country and tremendous cash going with the flow in at least one kingdom; in easy phrases, it's far the opportunity of threat-free earnings after transaction charges. As an example, an arbitrage possibility is present whilst there may be the opportunity to instantly purchase something for an extremely low fee and sell it for a better price.

Arbitrage is the simultaneous buying and sale of equal or comparable assets in unique markets in order to take advantage of tiny differences in the asset's listed rate. It exploits short-lived versions inside the rate of the same or similar economic units in different markets or in special forms.

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a real estate investment is available at an initial cash outlay of $100,000, and is expected to yield cash flows of $33,438.10 per year for five years. the internal rate of return (irr) is approximately:

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An investment in real estate is accessible for a $100,000 initial cash outlay and is predicted to generate $33,438.10 in cash flows over the course of five years. About 20% is the internal rate of return (irr).

Describe real estate.

Real estate is defined as the land and any affixed permanent structures, such as a house, or improvements, whether created naturally or artificially. Real property includes real estate.

Real estate includes land, the houses on it, and any natural resources such as crops, minerals, or water. It also includes immovable property of this kind, such as houses or other housing that meets common definitions of real estate.

Real property includes tangible personal property, which is something you own that is tied to a piece of land. It often comprises of any assets on the property, including water or minerals, and is suitable for residential, commercial, or industrial uses.

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Question 5 a company takes insights provided by its data analytics team, validates them, and finalizes a strategy. They then implement a plan to solve the original business problem. This describes the share step of the data analysis process.

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False. A company takes insights provided by its data analytics team, validates them, and finalizes a strategy. They then implement a plan to solve the original business problem. This describes the share step of the data analysis process.

What is the share step of data analysis?

The sharing of your data results is the fifth phase. This is possible with the use of visualization since putting data into an image can make the analysis easier for people to understand. You'll consider using several graphs and plots to more rapidly communicate your conclusions.

Ask, prepare, process, analyze, share, and act are the six phases or steps of data analysis, according to Go.ogle.

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A company takes insights provided by its data analytics team, validates them, and finalizes a strategy. They then implement a plan to solve the original business problem. This describes the share step of the data analysis process.

T / F

kasey is 72 years old. she purchased a single life annuity contract that will pay her $10,000 per year for 15 years. the expected return under the contract is:

Answers

Kasey is 72 years old, she purchased a single life annuity contract that will pay her $10,000 per year for 15 years, the expected return under the contract is $264,000.

By contract, what did you mean?

An agreement between parties that establishes legal duties for both parties is known as a contract. Mutual consent, demonstrated by a valid offer and acceptance, sufficient consideration, capability, and legality are the fundamental components needed for the agreement to be a legally enforceable contract.

Contract with example: What is it?

A commitment made by one party to another that they will or won't take a particular action in the future. As an illustration, I'll offer you $3,500 to buy your car. An acceptance. Usually reflects the conditions of the offer—an indication, through speech or action, that both parties accept the terms of the contract.

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performance appraisals are part of control. a. inventory b. physical c. financial d. information e. human resources

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The performance appraisals are part of control is human resources.

What is meant by human resources?The group of individuals who work for a given organisation, business sector, industry, or economy is referred to as its human resources. Human capital, or the knowledge and abilities that people possess, is a more specific idea. Manpower, labour, personnel, colleagues, or simply "people" are comparable concepts. Employees are hired, screened, and interviewed by human resources specialists, who also assign newly hired workers to positions.They could also be in charge of training, employee relations, and salary and benefits. Labor relations experts administer and interpret labour contracts. The individual or team in charge of overseeing everything linked to a company's personnel is known as human resources. This includes, but is not limited to, recruiting, benefit management, employee happiness, establishing a business culture, and training new personnel.

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All colleges in north and south carolina have a comprehensive articulation agreement with cpcc.

a. True
b. False

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All colleges in north and south carolina have a comprehensive articulation agreement with cpcc- false.

What is comprehensive articulation?

A state-wide agreement called the North Carolina Comprehensive Articulation Agreement (CAA) regulates the transfer of credits between public institutions and community colleges in the state. This agreement was created to encourage easy student transfers. A smooth student transition is the goal of the CAA, a state-wide agreement that governs the transfer of credits between NC community colleges and NC public institutions. gives the transferring student a few guarantees. The act of creating a formal, written agreement that specifies which courses (or sequences of courses) from a "sending" university are equivalent to or valid in place of particular course requirements at a "receiving" campus is known as articulation.

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ann transferred her right to receive money from carrie to bill. what interest, if any, does ann retain in the contract with carrie after the transfer of right to bill? a. ann may sue to enforce bill's right to receive the money due under the original contract. b. ann may sue in her own right as the original obligor on the contract with carrie. c. ann may sue in her own right as the original obligee on the contract with carrie. d. all of ann's rights in the contract with carrie ended with the transfer to bill.

Answers

With the transference to Bill, Ann's rights under the agreement with Carrie were completely terminated.

What does "bill" signify in the public sphere?

Legislative proposals made to Congress are known as bills. Marking the start of each Congress, bills are given numbers in the order they are introduced in each chamber (first and second sessions).

What are the relationship among a bill and a law?

A bill is delivered to the king for signature after being approved by the Senate and congress in exactly the same form. The legislation is made into law if the government passes it. Resolutions of House are another name for laws. Another term that is synonymous with law be statute.

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Rugged cabin co. provides pre-made materials to build cabins. to ensure materials are in supply and ready for quick delivery, the company offers cabins in only three sizes. each cabin has rectangular floor plan where the length is equal to 5 feet more than twice the width. which expression represents the area, in square feet, for each cabin size?

Answers

The expression that represents the area for each rectangular cabin size is given as follows:

A = 2w² + 5w.

How to obtain the area of a rectangle?

The area of a rectangle of length l and width w is given by the multiplication of these dimensions, as follows:

A = l x w.

Each cabin has rectangular floor plan where the length is equal to 5 feet more than twice the width, hence:

l = 2w + 5.

(as twice the width is 2w, five more than twice the width is 2w + 5).

Then the expression that represents the area for each rectangular cabin size is obtained as follows:

A = l x w

A = (2w + 5) x w.

Applying the distributive property, we have that:

A = 2w² + 5w.

(2w multiplies w, just like 5 multiplies w, then these terms are added).

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scrum uses a series of coordinated meetings to manage the development process. during which of the following is it discussed what was done since the last meeting, what will be done before the next meeting, and if anything is limiting performance?

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If during which of the following is it discussed what was done since the last meeting, the thing that will be done before the next meeting, and if anything is limiting performance is: A. Daily Scrum meeting.

What is Daily Scrum meeting?

Daily Scrum meeting can be defined as the type of meeting that is organized  so as to improve team development and to develop a plan that will be used to successfully achieve organizational goals and objectives.

Daily scrum meeting can help to identify issues or challenges that a company is facing  as well as how to combat the issues.

Therefore the correct option is A.

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The complete question is:

Scrum uses a series of coordinated meetings to manage the development process. During which of the following is it discussed what was done since the last meeting, what will be done before the next meeting, and if anything is limiting performance?

Daily Scrum meeting

Sprint review meeting

Sprint retrospective meeting

Sprint planning meeting

Release planning meeting

jonas has disability insurance through his employer. the employer pays 75% of the premium, and jonas pays the other 25%. what is jonas tax liability for any benefits paid from the disability

Answers

Jonas has disability insurance through his employer. Jonas's tax liability for any benefits paid from the disability takes must be paid on 75% of the benefits received.

Insurance is a contract whereby one insurer indemnifies another insurer against losses arising from certain contingencies or perils. Help protect the insured or her family from financial loss. There are many types of insurance policies.

Cover running costs and larger expenses such as your mortgage while you focus on your health and recovery. Cover medical expenses such as prescription drugs, dental care, eye care, and other health-related items.

Life insurance helps survivors financially. Health insurance protects you from devastating claims in the event of a serious accident or illness. A permanent disability protects you from an unexpected loss of income. Auto insurance protects you from the financial burden of expensive accidents.

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in a leed project, what tool should be used through all phases to ensure that the green goals are being met? question 1 options: a) the leed scorecard b) the commissioning plan c) the environmental impact statement d) usgbc.org

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in a Leed project, what tool should be used through all phases to ensure that the green goals are being met - a) the leed scorecard.

What does LEED scorecard mean?

The LEED scorecard, often known as a project checklist, is a one-page document that details the LEED rating system, adaptation, and version being sought, along with the credits that are intended to be earned.

To learn how to read and analyze a LEED Scorecard, let's examine one in detail. I still recall how confused I was when I first glanced at a LEED Scorecard. There is a lot of information on just single sheet of paper. Let's begin at the top. The version of LEED being pursued is displayed in the very first portion of the top line. It is LEED version 4 in this instance. The rating method, BD plus C, is followed by the adaption, New Construction and Major Renovation, in the next section. Next, you can view the requirements that are required but do not have any points awarded to them, which are listed on top of each LEED category. the left-hand green column.

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a prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made. true false

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a prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made- false.

What is retained earnings?

The retained earnings (also known as plowback[1]) of a corporation is the accumulated net income of the corporation that is retained by the corporation at a particular point of time, such as at the end of the reporting period. At the end of that period, the net income (or net loss) at that point is transferred from the Profit and Loss Account to the retained earnings account. If the balance of the retained earnings account is negative it may be called accumulated losses, retained losses or accumulated deficit, or similar terminology. Any part of a credit balance in the account can be capitalised, by the issue of bonus shares, and the balance is available for distribution of dividends to shareholders.

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the equity interest in a subsidiary not attributable directly or indirectly to the parent is known as the (select all that apply)

Answers

The equity interest in a subsidiary not attributable directly or indirectly to the parent are Non-Controlling Interest and Minority Interest.

What is equity interest?

Equity interest is an ownership interest in a company. It is a form of security that gives the holder the right to vote on certain matters, such as the election of directors and the approval of major corporate actions. Equity interest also provides a right to receive a share of the company’s profits, either through dividends, or through an increase in the value of the shares when they are sold. Equity interest is typically obtained by purchasing shares of stock in the company, either through a public offering or through private transactions.

Non-Controlling Interest and Minority Interest are correct answers. Non-Controlling Interest and Minority Interest refers to the equity interest that is not held by the parent company in a subsidiary. This equity interest is held by other investors or shareholders, such as individual shareholders or institutional investors.

Hence, Non-Controlling Interest and Minority Interest are the answers.

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factors affecting the span of management include all of the following except: authority of the manager. organizational policies. nature of the work being completed. competency of workers.

Answers

Uncontrollable costs, even as name suggests, are expenses that management cannot influence.

What part does management play?

A management position in an organisation entails accountability and oversight. Depending on the job titles as well as the needs of the business, they contribute in their companies in a variety of ways. Managers serve a variety of functions in the context of their work, from project managers to department managers.

What does the term "management" mean?

The process of completing the labour or task necessary for accomplishing an organisation's goals in an effective and efficient way is referred to as management. The procedure implies the management duties. Planning, organizing, staffing, leading, and managing are therefore involved.

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you purchased butterfly wing corporation stock exactly one year ago at a price of $77.95 per share. over the past year, the stock paid dividends of $2.98 per share. today, you sold your stock and earned a total return of 15.95 percent. what was the price at which you sold the stock?

Answers

The price at which you sold the stock is $88.50; Dividend yield = dividends paid / beginning share value = 4.01%; Capital gain yield: 0.1628 = 0.04 + g, g = 0.1128.
Current share price = beginning share price x (1 + g) = 88.50

A dividend is a benefit given to shareholders by publicly traded firms, and it is funded by the latter's net profit. These incentives, which can take the form of cash, cash equivalents, shares, etc., are often provided from the remaining portion of earnings after all necessary expenses have been covered. The board of directors of a firm determines the dividend rate, taking into account the consent of the majority of shareholders.

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current attempt in progress blue spruce corporation reported income taxes of $358,197,000 on its 2022 income statement, its balance sheet moored income taxes payable of $281:435,000 at december 31, 2021, and $517.957.000 at december 31, 2022 what amount of cash payments were made for income tapes during 2022

Answers

The amount of cash payments made for income taxes during 2022, given the balance sheet and income statement items is $121, 675, 000.

How to find the tax payment ?

The tax payment made by Blue Spruce Corporation in the year 2022, can be found by the formula :

= Beginning income tax payable + Income tax expense for 2022 - Ending income tax payable

Beginning income tax payable = $281,435,000

Income tax expense = $358,197,000

Ending income tax payable = $ 517,957,000

The cash payment for income tax is:

=  281,435,000 + 358,197,000 - 517,957,000

= $121, 675, 000

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chad watched as his friend, ned, learned the hard way that some influence tactics generate resistance. the employees pay little or no attention to what ned has requested of them. chad has a major project for his team. it needs to be completed on time, on budget. ned suggests using pressure tactics, but which influence tactic do you think chad should use?

Answers

Since research has shown that adopting the inspirational appeal influence method increases the likelihood that a commitment will be made, Chad should employ it.

An inspirational appeal is what?

Inspirational appeals, a type of appeal meant to inspire passion or feeling. Someone is employing inspirational appeal when they pique your interest in a subject by speaking to your values, aspirations, or goals.

What three different influencing strategies are there?

The most successful influence strategies among these were discovered to be inspirational appeal, consultation, and logical appeal (with inspiration appeal being the strongest successful of the three), whereas coalition and pressure were discovered to be the least successful strategies.

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if nancy uses employee-centered leadership, which action is she more likely to perform if a project is behind schedule?

Answers

Encourage the team's efforts and resolve any disputes that might detract from them. Using employee-centered leadership, Nancy

Why is leadership so crucial?

Leadership is crucial because it encourages, motivates, and provides a model for others to adopt to better the world. A leader must have a vision, a strategy, and a good working relationship with their team members. They consequently encourage others to work together to accomplish extraordinary things.

What does leadership theory entail?

A leadership theory describes how and why specific individuals take on leadership roles. The focus is on the qualities and behaviors that people can develop to increase their capacity for leadership. Leaders assert that a successful leader needs to have high moral principles and strong ethics.

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u.s. companies moving into the international market need to be sensitive to the need for local country or regional responsiveness because of: a. the increasing loss of economies of scale. b. the sophistication of the international consumer due to the internet. c. increasing rejection of american culture across much of the world. d. consumer needs and desires, industry conditions, political and legal structures, and social norms vary by country.

Answers

Each country has different consumer needs, political and legal systems, and social standards. The necessity for local country or regional responsiveness must be taken into account by the international market.

What exactly is the global stock market?

All global marketplaces that deal in stocks from their home-country corporations are together referred to as the international stock market. For instance, you can purchase Apple stock in your neighborhood American market, but you must visit the international (Japanese) market to purchase Sapporo shares.

What features distinguish the global market?

The production, pricing, promotion, and distribution of concepts, goods, and services are all part of the global process known as "international marketing," which aims to promote trade and achieve both individual and corporate goals.

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a company issued 9%, 5-year bonds with a par value of $145,000. the market rate when the bonds were issued was 10%. the company received $139,400 cash for the bonds. using the effective interest method, the amount of interest expense for the first semiannual interest period is:

Answers

The amount of interest expense for the first semiannual interest period is $2,497.50. The fee a lender assesses a borrower for using their funds is known as an interest expense.

How to calculate interest expense ?

To calculate the interest expense for the first semiannual interest period, we need to first determine the annual interest rate, which is the market rate of 10% divided by 2 because the interest period is semiannual.

This results in an annual interest rate of 5%. We also need to determine the effective interest rate, which takes into account the difference between the par value and the price at which the bonds were issued. To do this, we can use the following formula:

effective interest rate = [(par value - cash received) / par value] / number of years

Plugging in the values given in the question, we get:

effective interest rate = [(145,000 - 139,400) / 145,000] / 5

= 0.0379

We can then use this effective interest rate to calculate the interest expense for the first semiannual period by multiplying it by the par value and dividing by 2, because the interest period is semiannual. This gives us:

interest expense = (0.0379 * 145,000) / 2

= $2,497.50

Therefore, the amount of interest expense for the first semiannual interest period is $2,497.50.

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when would arbitration be a preferred way to resolve a dispute or negotiations impasse? please explain your answer.

Answers

Unlike a trial, arbitration leads to a private resolution, so the information brought up in the dispute and resolution can be kept confidential.

What is the meaning of arbitration?

A dispute can be resolved through arbitration instead of going to court. The person you are filing a claim against is the respondent, and you are the claimant. An impartial party known as an arbitrator hears your two cases.

Arbitration a sign of a deal?

Instead of going to court, a dispute can be resolved through arbitration by a neutral third party. Both parties rely on the arbitrator, an impartial person or panel, to render an appropriate conclusion in light of the case's facts. An arbitration award is the name given to the final ruling.

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The concept of _________________ means that as the measure of output goes up, average costs of production decline—at least up to a point.
relative advantage
economies of scale
absolute advantage
comparative advantage

Answers

The concept of economies of scale means that as the measure of output goes up, average costs of production decline—at least up to a point.

Therefore, option B is correct.

Economies of scale  can be described as a concept in economics which can be regarded as the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time.

It should be noted that internal and external economies of scale are distinguished. Internal economies of scale are reached when a corporation expands production while lowering costs. Outside of a company, external economies of scale exist within an industry.

Thus, external economies of scale may occur when an industry's operational range increases as a result of outside innovations. For instance, a company's costs as well as those of its industry may go down as a result of the development of a stronger transportation network. All businesses within the industry profit when external economies of scale take place.

Therefore, option B is correct.

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a silver futures contract requires the seller to deliver 5,000 troy ounces of silver. an investor sells one april silver futures contract at a price of $15 per ounce, posting an $8,400 initial margin. if the required maintenance margin is $6,900, the price per ounce at which the investor would first receive a maintenance margin call is closest to:

Answers

The investor would first receive a maintenance margin call is closest to

15.3

How to Calculate Margin call?

Increase in price per ounce=Number of ounces-Required margin maintance/Initial margin

=8400-6900/5000

=0.3

Future price =Selling price per ounce + Increase in price per ounce

=15+.3

=15.3

Initial Purchase Price x [(1 - Initial Margin) / (1 - Maintenance Margin)] = Margin Call Price. The margin call price serves as a benchmark for the price below which the margin requirements are not satisfied, forcing the investor to make more deposits or sell off a certain portion of their portfolio assets in order to comply.The investor can deposit cash in the amount of the margin call to cover it. As an alternative, the investor can sell sufficient securities to satisfy the margin need with the remaining equity. Let's say the investor does not want to add to the $2,000 cash balance in the account.

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