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lakkis [162]
3 years ago
8

On January 2, 2016, Jennings Company purchases machinery and equipment and borrows $200,000 on a 5-year non-interest-bearing not

e. The principal of $200,000 will be paid at the maturity date of December 31, 2020. To place a fair value on the transaction, the accountant will impute an interest rate and use that rate to compute the present value of the note.Required: Assuming that an 8% interest rate is applicable, record the journal entry for interest expense for the year ended December 31, 2016.
Business
1 answer:
Zanzabum3 years ago
5 0

Answer:

December 21, 2016

DR Interest expense....................................................$10,889.33

CR Discount on notes payable.......................................................$10,889.33

Explanation:

The interest to be paid will be charged on the present value of the note in 2016.

Present value of $200,000 = 200,000 / ( 1 + 8%)^5

= 200,000/1.4693280768‬

= $136,116.64

Interest to be paid;

= 136,116.64 * 8%

= $10,889.33

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Select which of the ways that entrepreneurs improve the economy is being described:
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Answer:

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new business

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7 0
3 years ago
In 2005, BridgePort Brewing Company expanded sales of its BridgePort India Pale Ale, and BridgePort Black Strap Stout into Alaba
Rina8888 [55]

Answer: organizing

Explanation:

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7 0
2 years ago
The Molding Department of Kennett Company has the following production data: beginning work in process 25,000 units (60% complet
Masja [62]

Answer:

450,000 units

Explanation:

This question asks to calculate the equivalent units of materials. It must be known that equivalent units are calculated by multiplying the number of physical units by percentage of completion.

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= 25,000 units + 425,000 units = 450,000 units

8 0
3 years ago
The stock of Cooper Corporation is​ 70% owned by Carole and​ 30% owned by​ Carole's brother, Chris. During​ 2017, Chris transfer
g100num [7]

Answer:

$0

Explanation:

Since 100% of Cooper Corporation's stock were owned by Carole and Chris (who are siblings), then no one can recognize any loss or gain from the contribution of property (nor the distribution of property). Under section 351, no gain or loss can be recognized for the contribution of property in exchange for stocks in a controlled corporation.

Since the contribution was made through a carryover basis transaction less than 5 years before the liquidation, the distribution is carried out in the same way.

6 0
3 years ago
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