Answer:
The correct option is C,$500
Explanation:
The amount of interest accrual is the interest on the sum borrowed from October 1 2016 to 31 December 2016,that is 3 months of interest,which is computed below:
Accrued interest =principal*stated interest rate*number of accrued months/12
principal is $25,000
stated interest is 8%
number of accrued months is 3
accrued interest =$25,000*8%*3/12=$500
The accrued interest is to be debited interest expense because it is an increase in expense and credited to interest payable as a liability
Answer:
D. Date Accounts and Explanation Debit Credit Interest Expense 21,385 Discount on Bonds Payable 235 Cash 21,150
Explanation:
The journal entry is shown below:
Interest expense $21,385
To Discount on bond payable $235
To Cash $21,150
(Being the interest expense is recorded)
The computation is given below:
The interest expense is
= $470,000 ÷ 100 × 91 × 10% ÷ 12 months × 6 months
= $21,385
The cash is
= $470,000 × 9% ÷ 12 months × 6 months
= $21,150
And, the remaining balance is credited to discount on note payable
We simply debited the interest expense as it increased the expenses and credited the cash as it reduced the assets plus the remaining amount is credited to discount on bond payable
Such a person is the PROJECT SPONSOR. A project sponsor is the person with the overall accountability for a project, he has the responsibility to ensure that the project delivers the agreed business benefits. He is usually the one who is responsible for securing the financing and total resources project approval.
