Norris Corporation purchased a $500,000 held-to-maturity security on January 1, 2003. The company was expecting a 4% rate of return. The security…

Norris Corporation purchased a $500,000 held-to-maturity security on January 1, 2003.  The company was expecting a 4% rate of return.  The security matured on December 31, 2004.

a. Determine the amount that Norris would have been willing to pay for the security on January 1, 2003.

b. Assume that interest rates remain at 4%.  What will be the value of the security on December 31, 2004?

c. Prepare the entries necessary on the following dates:  January 1, 2003 for the purchase of the security, December 31, 2003, adjusting entry, December 31, 2004, adjusting entry

d. Assume that, instead of remaining stable at 4%, interest rates rise to 6% over the life of the security.  What would you expect to happen to the value of the security over its life?  Explain.  Would it change any of the accounting requirements? Explain.

e. Assume that because of continuing economic weakness, interest rates fall to 3%.  What would you expect the value of the security to be on December 31, 2003 and December 31, 2004?

f.  Assuming interest rates fell to 3%, prepare any necessary adjusting entries related to the security that would be required on December 31, 2003, and December 31, 2004.

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more