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If smileytown consumed 50,000 tubes of toothpaste in 2019, and in 2020, toothpaste consumption rose to 62,000 tubes, then there is a 24 percentage of change in the toothpaste consumption.
<h3>What is the significance of consumption?</h3>
The consumption of any commodity can be referred to or considered as the quantity purchased by consumers for utilization in an economy during a given period of time.
We can infer that 50000 + 24% = 62000, and thus, the percentage change in the toothpaste consumption of smileytown between 2019 and 2020 is 24 percent.
Therefore, the significance regarding the change in consumption has been aforementioned.
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Answer:
The journal entries are as follows:
(i) On January 1, 2021
Delivery Truck A/c Dr. $10,000
To 6% loan note payable $10,000
(To record the issuance of note payable)
(ii) On January 31, 2021
6% loan note payable A/c Dr. $254.22
Interest expense A/c Dr. $50
To cash $304.22
(To record the first month payment)
Workings:
Interest expense = $10,000 × 6% × (1/12)
= $50
