Answer:
Dr. Cr.
Cash $514,100
Discount on bond payable $15,900
Bond Payable $530,000
Explanation:
Cash is received against the Bond issued is debited due to its debit nature and the bond payable account is credited because it is a liability and its nature is credit.
Cash Received = ( 530,000 / 100 ) x 97 = $514,100
Discount = (530,000/100) x (100 - 97) = $15,900
Answer:
See below.
Explanation:
Since the expenses are related to the formation of the business, we first capitalize these expenses and record them in our balance sheet as,
Debit Intangible Assets (Formation) by $48,500
Credit Cash/Bank by $48,500
This records an asset for the year of operation.
We amortize or depreciate these type of capitalized costs over a defined period of time. Assuming that we write off the entire cost by the end of first year we will record amortization as,
Debit Amortization expense/Income statement by $48,500
Credit Intangible Assets (Formation) by $48,500
Hope that helps.
Answer:
Accounting treatment (debit credit rules) of given entries
Explanation:
- Purchased office furniture on account Account
Furniture ie Asset increase - Debit , Creditor (Furniture Supplier) ie Liability increase - Credit
- Provided services on account
Debtor ie Asset increase - Debit , Sale ie Income increase - Credit
Prepaid Expense (Rent) ie Asset Increase - Debit. Rent paid now implies later rent ie (Expense) decrease - Credit
Answer:
1. Tax avoidance
2.Tax avoidance
3.Tax evasion
Explanation:
Tax avoidance refers to a legal way of reducing one's tax liability through lawful deductions. Ways to reduce tax liabilities are; capitalizing on tax advantage retirement accounts, liasing with tax advisor on the legal way for tax avoidance. Tax avoidance is however legal.
Examples of tax avoidance are;
1. Andrea keeps a record of all her business related expenses.
2. Daniel claims the amount of interest paid for his mortgage as tax deductions.
Tax evasion is a deliberate attempt by a tax payer to avoid payment of tax liability. It is a fraudulent action by a tax payer to wilfully evade tax in an illegal manner. In tax evasion, income is concealed to tax authorities inorder to evade tax payment which is a criminal offence. It is to be noted that tax evasion is illegal in the eye of the law.
Example of tax evasion is ;
3. Christian did not report the tips he earned on his tax return.
Answer:
D) Buyer
Explanation:
The buyer is responsible for developing the technical specifications of the product that is going to be purchased, inviting potential vendors, and will also be the person in charge of actually executing the purchase. The buyer is the person that has the actual authority and is responsible for carrying out the purchase.
