1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
yulyashka [42]
3 years ago
11

On October 1, Eder Fabrication borrowed $55 million and issued a nine-month, 13% promissory note. Interest was payable at maturi

ty. Prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the note at December 31, the end of the reporting period.
Business
1 answer:
vesna_86 [32]3 years ago
8 0

Answer:

Issuance of the note:

Debit Cash $55,000,000

Credit Notes payable $55,000,000

<em>(To recognize notes payable)</em>

On December 31:

Debit Interest expense $5,362,500

Credit Interest payable $5,362,500

<em>(To recognize the interest payable at Dec 31)</em>

If Eder Fabrication chooses to pay off on December 31, the following entries would apply:

Debit Notes payable $55,000,000

Debit Interest payable $5,362,500  

Credit Cash $60,362,500

<em>(Payment of notes payable)</em>

Explanation:

Note is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.

Interest expense on the notes is calculated as: Principal x Interest Rate x Time

In this case, the total interest expense is $55,000,000 x 13%/12 x 9 months = $5,362,500.

Monthly interest expense is therefore $5,362,500 / 9 months = $595,833.33.

You might be interested in
Unlike product, promotion, or place, price is the only part of the marketing mix
mario62 [17]
Yes, its is the only thing marketing mix does. 
4 0
3 years ago
Under AICPA rules, which statement best describes the period of the professional engagement as it applies to a three-year engage
gizmo_the_mogwai [7]

Answer: The correct answer is "D. It begins when the engagement letter is signed and continues until the report for the third year is issued unless the relationship is terminated sooner.".

Explanation: The statement "It begins when the engagement letter is signed and continues until the report for the third year is issued unless the relationship is terminated sooner." best describes the period of the professional engagement as it applies to a three-year engagement to audit client's financial statements since this type of professional commitment begins with the signing of the document that formalizes the commitment and is in force until the issuance of the last report unless the relationship is resolved beforehand by another circumstance.

4 0
2 years ago
1. You have a portfolio that is invested 21% in Stock A, 34% in Stock B, and 45% in Stock C. The betas of the stocks are .66, 1.
MrMuchimi

Answer:

1.

Portfolio Beta = 1.225 rounded off to 1.23

Option e is the correct answer.

2.

r = 0.13338 or 13.338% rounded off to 13.34%

Explanation:

1.

The portfolio beta is a function of the weighted average of the individual stocks' betas that form up the portfolio. To calculate the beta of a portfolio, we use the following formula,

Portfolio Beta = wA * Beta of A  +  wB * Beta of B  + ... + wN * Beta of N

Where,

w is the weight of each stock

Portfolio Beta = 0.21 * 0.66  +  0.34 * 1.21  +  0.45 * 1.5

Portfolio Beta = 1.225 rounded off to 1.23

2.

Using the CAPM, we can calculate the required rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.

The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate

rM is the market return

r = 0.037  +  1.22 * (0.116 - 0.037)

r = 0.13338 or 13.338% rounded off to 13.34%

3 0
2 years ago
Souza Inc, which produces and sells a single product, has provided its contribution format income statement for October.
Dafna1 [17]

Answer:

d. $300

Explanation:

Calculation for what its net operating income should be closest to

Using this formula

First step is to calculate the contribution margin per unit using this formula

Contribution margin per unit= Contribution margin ÷ Number of units

Let plug in the formula

Contribution margin per unit= $48,000 ÷ 4,000 units

Contribution margin per unit= $12

Second step is to calculate the contribution margin

Contribution margin = 3,500 units × $12

Contribution margin = $42,000

Now let calculate the net operating income using this formula

Net operating income = Sales - Variable cost - Fixed expenses

Let plug in the formula

Net operating income= $42,000 - $41,700

Net operating income= $300

Therefore its net operating income should be closest to $300

8 0
2 years ago
Augi is the hottest new pop singer, but her agent discovers that Internet sales of Augi's music have been poor due to Internet p
Serggg [28]

Answer:

The correct answer is letter "C": keep prices of downloads low and raise prices for concerts and merchandise.

Explanation:

To maximize profits, Augi's agent should not stop doing any of the commercial activities the pop singer has been carrying out. However, a way to deal with Augi's music internet piracy, the agent could lower the online-song prices but the "losses" can be compensated by raising the concert ticket prices and the singer's merchandise sold there since most of Augi's concerts are sold-outs.

3 0
2 years ago
Other questions:
  • Chrzan, Inc., manufactures and sells two products: Product E0 and Product N0. Data concerning the expected production of each pr
    13·1 answer
  • LeMay Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 4 boxtops from LeMay Frosted Flakes boxe
    13·1 answer
  • In recording business transactions, evidence that an accounting transaction has taken place is obtained from
    7·1 answer
  • Exercise 14-1 On January 1, Guillen Corporation had 90,000 shares of no-par common stock issued and outstanding. The stock has a
    10·1 answer
  • Which of the following is NOT an example of a negative externality?
    13·1 answer
  • Deregulation always leads to lower prices for the consumer.<br> True.<br> False.
    12·1 answer
  • g Explain the traditional interest-rate channel for expansionary monetary policy. Explain how a tight monetary policy affects th
    11·1 answer
  • On March 15, a fire destroyed Interlock Company's entire retail inventory. The inventory on hand as of January 1 totaled $4,950,
    12·1 answer
  • I need money to buy something.
    6·1 answer
  • Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. when will the check be d
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!