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Rufina [12.5K]
3 years ago
9

On October 1, 20X1, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had

borrowed the money from a bank to pay the seller immediately, management estimates the bank would have required interest of 9%. Calculate the amount of interest expense the company would record for its year ending December 31, 20X1 (rounded to the nearest dollar).
a. $40,500.
b. $9,289.
c. $10,125.
d. $8,522.
Business
1 answer:
Vitek1552 [10]3 years ago
7 0

Answer:

The answer is c. $10,125.

Explanation:

interest rate = 9%

loan amount= 450000

time = 0.25years

Interest charge = 450000* 0.25 * 0.09 =$10,125.

The interest  charge will be $10,125 because the loan was taken in October and the financial year  ends in December, which makes it 3 months which is 0.25 years.

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Answer and Explanation:

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Answer:

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<em> They must consider if the adjustment is material or significant enough to record. </em>

5 Auditiors need to consider <u>shipping terms</u> terms for determining ownership and whether a liability should be recorded.

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6 0
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You’re a broker writing an mls policy for your firm. which would you likely want to include?
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1 year ago
Explain the following factors that influence the choice of funding: risk
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Risk is the major factor to consider when deciding the funding, when funds are provided it is a risk that whether the funds will be received or not.

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6 0
1 year ago
Sidney took a $150 cash advance by using checks linked to her credit card account. The bank charges a 2 percent cash advance fee
strojnjashka [21]

Answer:

A.) 3%; B.) 2% ; C) $155; D) $150

9) $78 ; $1278

10) a) $5940; b) $19440; c) $279; D) 21.64%

Explanation:

Amount = $150

Cash advance rate = 2% = 0.02

A.) cash advance fee = $150 × 0.02 = $3

B.) Interest for one month at APR of 18%

Interest = principal × time × rate

$150 × (1÷12) × 0.16 = $2.00

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$(150 + 3 + 2) = $155

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9.)

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t = 6 months = (6/12)

Rate (r) = 0.13

Principal = $1200

Interest = $1200 × 0.13 × 0.5 = $78

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10.)

Price = $13,500

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Monthly payment = $16740 ÷ 60 =$279

D.) Annual percentage rate (APR)

APR= (2 × n × I) / [P × (N + 1)]

APR = (2 × 12 × 5940) / [10800 × (60+1)]

APR = 142560 ÷ 658800

APR = 0.21639

APR = 21.64%

7 0
3 years ago
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