Colah company purchased $1 million of jackson, inc., 5% bonds at par on july 1, 2018, with interest paid semiannually. colah determined that it should account for the bonds as an available-for-sale investment. at december31, 2018, the jackson bonds had a fair value of $1.2 million. colah sold the jackson bonds on july 1, 2019 for$900,000.required: 1. prepare colah’s journal entries to record: a. the purchase of the jackson bonds on july 1b. interest revenue for the last half of 2018c. any year-end 2018 adjusting entriesd. interest revenue for the first half of 2019e. any entries necessary upon sale of the jackson bonds on july 1, 2019, including updating the fair-valueadjustment, recording any reclassification adjustment, and recording the sale2. fill out the following table to show the effect of the jackson bonds on colah’s net income, other comprehensiveincome, and comprehensive income for 2018, 2019, and cumulatively over 2018 and 2019.2018 2019 totalnet incomeocicomprehensive income

Franklin painting company is considering whether to purchase a new spray paint machine that costs $4,800. the machine is expected to save labor, increasing net income by $720 per year. the effective life of the machine is 15 years according to the manufacturer’s estimate. required determine the unadjusted rate of return based on the average cost of the investment.

The cost of capital: introduction the cost of capital: introduction companies issue bonds, preferred stock, and common equity to aise capital to invest in capital budgeting projects. capital is』necessary factor of production and like any other factor, it has a cost. this cost is equal to the select the applicable security. the rates of return that investors require on bonds, preferred stocks, and common equity represent the costs of those securities to the firm. companies estimate the required returns on their securities, calculate a weighted average of the costs of their different types of capital, and use this average cost for capital budgeting purposes. required return on rate: when calculating om operations when the firm's primary financial objective is to select shareholder value. to do this, companies invest in projects that earnselect their cost of capital. so, the cost of capital is often referred to as the -select -select and accruals, which a se spontaneously we hted average cost of capital wa c our concern is with capital that must be provided by select- 쑤 interest-bearing debt preferred stock and common equity. capital budgeting projects are undertaken, are not included as part of total invested capital because they do not come directly from investors. which of the following would be included in the caculation of total invested capital? choose the response that is most correct a. notes payable b. taxes payable c retained earnings d. responses a and c would be included in the calculation of total invested capital. e. none of the above would be included in the cakulation of total invested capital.

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.