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andreev551 [17]
3 years ago
13

On July 1, 2021, Markwell Company acquired equipment. Markwell paid $185,000 in cash on July 1, 2021, and signed a $740,000 noni

nterest-bearing note for the remaining balance which is due on July 1, 2022. An interest rate of 6% reflects the time value of money for this type of loan agreement.
Which of the following should be included in the journal entry on July 1, 2021?

a. Credit: Notes payable, $698,116.
b. Debit: Equipment, $925,000.
c. Debit: Discount on notes payable, $41,884.
d. Credit: Notes payable, $698,116 and Debit: Discount on notes payable, $41,884.
Business
1 answer:
Alenkasestr [34]3 years ago
7 0

Answer:

c. Debit: Discount on notes payable, $41,884.

Explanation:

The journal entry is shown below:

Equipment    $883,116  

Discount on Notes payable $41,884  ($740,000 - $698,116)

        To Notes payable       $740,000  

        To Cash                       $185,000

(Being the amount paid in cash and note payable is recorded)

Working note

= Note payable amount × PVF factor at 6% for one year

= $740,000 × 0.94340

= $698,116

For recording this we debited the equipment as it increased the assets and discount is always debited while the note payable and cash is credited as it increased the liabilities and reduced the assets

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Madrid Company has provided the following data (ignore income taxes):
Romashka [77]

Answer:

C.Retained earnings increased $33,900 during 2014.

Explanation:

Total expenses during the year=Revenue- net income

                                                   =77,500-33,900

                                                   =$43,600

Therefore, option A. is correct

Total Liabilities=Total assets-total equity

                        =217,000-123,000

                       =$94,000

Therefore, option B. is correct

The formula for calculating  Retained earnings is given as follows:

Retained earnings at year end=Opening retained earnings+net income-dividend paid.

83,000=opening retained earnings+33,900-5,700

opening retained earnings=83,000-33,900+5,700

                                           =54,800

Change in retained earnings=closing retained earnings-opening retained earnings

Change in retained earnings=83,000-54,800=28,200

Therefore, Option C. is not correct

Common stock at December 31, 2014=total equity-total retained earnings

                                                              =123,000-83,000

                                                              =$40,000

Therefore, Option D. is correct

Based on the above discussion the answer is C.Retained earnings increased $33,900 during 2014.

8 0
3 years ago
Read 2 more answers
Describe the branding strategies used by Hormel and how Justin's products fit into the Hormel product line.
Roman55 [17]

The branding Strategy that was used by Hormel is known as the multi product branding.

<h3>What is branding?</h3>

It should be noted that branding simply means the process of creating a strong, positive perception of a company.

In this case, the branding srategy that was used by Hormel is known as the multi product branding.

Learn more about branding on:

brainly.com/question/1234049

5 0
2 years ago
Bissell Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan asset
ivanzaharov [21]

Answer:

$205,200

Explanation:

              Calculation of Pension Expense

Service Cost                                         $198,000

Interest cost                                          $33,000

Expected return on the plan assets    <u>($25,800)</u> (258000*10%)

Pension Expense                                  <u>$205,200</u>

So therefore, the pension expense for the year is $205,200.

4 0
2 years ago
The country of Lessidinia has a tax system identical to that of the United States. Suppose someone in Lessidinia bought a parcel
kati45 [8]

Answer:

after tax real rate of capital gain = - 30%

so correct option is B. -30 percent

Explanation:

given data

bought land = 20,000 foci

price Index = 100

sold land = 100,000 foci

price index = 600

tax rate = 20 percent

to find out

Compute the taxes on the nominal gain and the change in the real value of the land and after-tax real rate of capital gain

solution

first we get here tax on nominal gains that is express as

tax on nominal gains = tax rate × gain

tax on nominal gains = 20% × ( 100,000 - 20,000 )

tax on nominal gains = 16000 foci

and

Real gain is here as

Real gain = sold land - price index ( bought land )

Real gain = $100,000 - 6 ( 20000)

Real gain = - $20000 foci

and

now after tax real rate of capital gain will be here as

after tax real rate of capital gain = (Real gain - tax on nominal gains ) ÷ ( sold land - real gain )   × 100

after tax real rate of capital gain = \frac{-20000-16000}{120000}  × 100

after tax real rate of capital gain = - 30%

so correct option is B. -30 percent

5 0
3 years ago
It is not a consumers responsibility to report fraudental activity
creativ13 [48]

If this is a true/false question, the answer is FALSE.

It is consumers' responsibility to report fraud when it occurs.

4 0
3 years ago
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