Question: Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd has the contractual obligation to repay the loan

Ted Ltd receives a loan of ( $ 200,000 ) from Smith Ltd on 1 July 2019 . Ted Ltd has the contractual obligation to repay t

Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd has the contractual obligation to repay the loan in 3 years' time. Ted Ltd currently has a AAA credit rating and can borrow at 5%. On 30 June 2020, Ted Ltd's credit rating decreases to a AA and its borrowing rate worsens to 7%. What is the impact on Ted Ltd's Financial Statements on 30 June 2020 given the change of credit rating? A gain of $9,508 No impact A gain of $6,718 A loss of $9,508

Step by Step Solution

★★★★★

3.47 Rating (154 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

ANSWER A NO IMPACT REASON There is a contract between Ted company and Smith company ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Marketing Questions!

Suppose you are put in charge of fiscal policy for the economy described in Test Yourself Question 1. There is an inflationary gap, and you want to reduce income by $120. What specific actions can...

You have been put in charge of determining the feasibility of renovating a 50-year-old local recreation facility that includes four multipurpose courts, a fitness center, and a swimming pool/aquatic...

- Apple CEOSteve Jobs claimed on June 7, 2010, that its online bookstore iBookstore had captured a 22% share of the U.S. e-book market. To verify this claim, a random sample of 200 recent e-book...

Question 4 1 pts Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd has the contractual obligation to repay the loan in 3 years' time. Ted Ltd currently has a AAA credit...

Ted Ltd receives a loan of $100,000 from Smith Ltd on 1 July 2021. Ted Ltd has the contractual obligation to repay the loan in 3 years time. Ted Ltd currently has a AA credit rating and can borrow at...

Ted Ltd receives a loan of $100,000 from Smith Ltd on 1 July 2021. Ted Ltd has the contractual obligation to repay the loan in 3 years' time. Ted Ltd currently has a AA credit rating and can borrow...

This is an annual report of an Agricultural Marketing Company Ltd . Now ans the question below; Who are the users of the accounting information of this business. ?What are the different types of...

Myob software required Note: background information at the bottom (starting form page 10) PART 1: Self-Reection 10 Marks do this rt last This reflection asks students to attend to the following two...

Use the financial statements attached to answer (short answers) the following questions (for the city of Richmond, VA) 1. How does the audit opinion given to this city by its independent auditors...

Melbourne Ltd receives a loan of $200,000 from Sydney Ltd on 1 July 2022. Melbourne Ltd has the contractual obligation to repay the loan principal in 3 years time without any interests. Melbourne Ltd...

What is a disadvantage associated with the replacement value method of a business valuation? options: It does not realistically reflect the market value of the assets. It does not account for...

Below shows the monthly repayment table of a personal instalment loan. Monthly Monthly Repayment Monthly Repayment Repayment Amount - Based Amount - Based Amount - Based on every $10,000 on every...

02.07-PR001 How many monthly payments are required to repay a loan of $12,000 with an interest rate of % per month and end-of-month payments of $400?

Olaf Distributing Company completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Olaf showed Cash of $9,000 and M. Olaf, Capital of $9,000....

Suppose the Schoof Company has this book value balance sheet: The current liabilities consist entirely of notes payable to banks, and the interest rate on this debt is 10%, the same as the rate on...

Closing down divisions. Aristide corporation has four operating divisions. During the first quarter of 2009, the company reported total income from operations of $61,000 and the following results for...

DeVito Company operates in a state where corporate taxes and workmens compensation insurance rates have recently doubled. DeVitos president has assigned you the task of preparing an economic analysis...

At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC) include the following: Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $...

describe the condensation from a vehicle air-conditioner flowing from the vehicle and pooling a short distance away

Suzy Ltd receives a loan from Lex Ltd on 1 July 2018 and enters into a contractual obligation to repay $300,000 in 3 years time. Suzy currently has an AA credit rating and can borrow at 5%. On 30...

Problem 3: Chapter 8: Capital Gains Instructions: Mr. Geoffrey Guo had a variety of transactions during the 2019 year. Determine the total taxable capital gains included in Mr. Guo's division B...

Mr. Geoffrey Guo had a variety of transactions during the 2019 year. Determine the total taxable capital gains included in Mr. Guo's division B income. The transactions included: 1. On January 1,...