Company A and Company B are identical in all regards except that during Year 1 Company A borrowed $38,000 at an interest rate of 10%. In contrast, Company B obtained financing by acquiring $38,000 from sale of common stock. Company B agreed to pay a $3,800 cash dividend each year. Both companies are in a 30% tax bracket. Which company would show the greater retained earnings at the end of Year 1, and by what amount? On January 1, Year 1, Weller Company issued bonds with a $415,000 face value, a stated rate of interest of 9%, and a 10-year term to maturity. Weller uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 7%. Interest is paid annually on December 31. Assuming Weller issued the bond for $442,940, what is the amount of interest expense that will be recognized during Year 3? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) On January 1, Year 1, Brown Company issued bonds with a face value of $101,000, a stated rate of interest of 9%, and a 20-year term to maturity. The bonds were issued at face value. If Brown's tax rate is 40%, what is the after-tax cost of borrowing related to these bonds for Year 1? Kier Company issued $760,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 4-year term to maturity. The bonds have a 6.50% stated rate of interest and interest is payable in cash on December 31 each year. Based on this information alone, what are the amounts of interest expense and cash flows from operating activities, respectively, that will be reported in the financial statements for the year ending December 31, Year 1