When buying on margin, brokers typically charge low interest.
<h3>What is margin?</h3>
Margin is the sum of money borrowed from a broker to pay for an investment; it is equal to the difference between the investment's entire value and the loan sum.
In the field of finance, the term "margin" has many different definitions. A company's profitability can be determined by looking at its profit margin. Margin is a deposit made by an investor to open a position in the realm of futures trading. In contrast, the margin in stock trading is cash borrowed from a broker. However, before taking out one of these loans, keep in mind that interest will be charged on money borrowed in margin accounts.
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Answer:
When government gives money to a college student this is an example of a consumer subsidy.
Explanation:
A government performs different roles in the economy of a company to ensure that income and resources are equally distributed to various people in the country. For example, the government utilizes economic policies to ensure that economically vulnerable groups in the society are given a chance towards economic growth by providing them with subsidies and low-cost loans, housing and healthcare to ensure that they have a chance at growing economically. Another way the government distributes income and resources is by providing tax cuts to the poor or those with low income while at the same time increasing taxes to the rich and wealthy. Examples of vulnerable groups in the society are; the poor, people with low income, the unemployed, people of old age, and the youth and children.
In our case,we will consider consumer subsidy. Consumer subsidy is the act of providing benefits to a certain group in the society. The benefits can be in the form of; tax cuts and cash payments to that particular group or individual. An example is the government giving money to a college student in the form of consumer subsidy. College fees is usually very high and cannot be afforded by most students, government subsidies assist these students to go to college.
Answer:
A. Dr Cash $100,000
Cr Notes Payable $100,000
B. Dr Interest expense $1,500
Cr Interest Payable $1,500
Explanation:
a Preparation of the entry on April 1 when the note was issued.
Dr Cash $100,000
Cr Notes Payable $100,000
(To record note issued)
B. Preparation of any adjusting entries necessary on June 30 in order to prepare the semiannual financial statements
Dr Interest expense $1,500
Cr Interest Payable $1,500
($100,000 x .06 x 3/12)
