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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.

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Answer:

a.

Date                   Account Title                                     Debit                   Credit

XX-XX-XXXX     Raw materials inventory              $90,000

                           Accounts Payable                                                    $90,000

b.

Date                   Account Title                                     Debit                   Credit

XX-XX-XXXX     Work in Process Inventory           $64,000

                           Raw materials inventory                                          $64,000

c.

Date                   Account Title                                     Debit                   Credit

XX-XX-XXXX     Work in Process inventory            $30,000

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d.

Date                   Account Title                                     Debit                   Credit

XX-XX-XXXX     Work in Process Inventory             $20,000

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7 0
3 years ago
A firm purchased 50 units of materials with a unit price of $1.30 on June 1. On June 15, the firm purchased 50 units with a unit
dsp73

Answer: $83

Explanation:

Given that,

On 1 June,

Materials purchased = 50 units

Unit price of material = $1.30

On June 15,

Materials purchased = 50 units

Unit price of material = $1.20

Total cost of 65 units:

= (Material purchased on 1 June × Unit price of material) + [(65 units - 50 units) × $1.20]

= (50 units × $1.30) + (15 units × $1.20)

= $65 + $18

= $83

8 0
3 years ago
A balance is _____.
Serggg [28]

Answer:

money you pay banks

Explanation:

8 0
3 years ago
Using a single plantwide rate from question 25, the factory overhead allocated per unit of Product A in the Painting Department
fiasKO [112]

Answer:

a. $236.32 per unit

Explanation:

The Full question is "Adirondak Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Overhead Total Direct Labor Hours DLH per Product A B Painting Dept. $250,000 10,000 16 4 Finishing Dept. 75,000 12,000 4 16 Totals $325,000 22,000 20 20"

A single plant wide factory overhead rate is been used. Thus, Overhead rate per hour = $325000 / 22000 hrs = $14.77

The total hours required to produce a product = 20 hours in painting + 20 hours in finishing

The total hours required to produce a product = 40 hours

Overhead per product = Overhead rate per hour * The total hours required to produce a product

Overhead per product = $590.8

The DLH required for a product A in painting department = 16 DLH

. Overhead rate per unit for product A in painting department = ($590.8/40 DLH) *16 DLH = $236.32 Per Unit

8 0
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prisoha [69]

Explanation:

In working environment interpersonal relationship plays a paramount role in developing and stimulating

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