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Rina8888 [55]
2 years ago
9

On April 12, Hong Company agrees to accept a 60-day, 10%, $6,100 note from Indigo Company to extend the due date on an overdue a

ccount. What is the journal entry needed to record the transaction by Indigo Company?
Business
1 answer:
devlian [24]2 years ago
8 0

Answer:

Explanation:

Since Notes payable is $6,100

The interest would be = $6,100 × 10% × 60÷ 360

                                     = $101.67

Total of interest + notes payable = $6100 + $101.67

                                                      = $6201.67

So, the journal entry would be

Notes payable A/c Dr    $6,100

Interest Expense A/c Dr $101.67

         To Cash A/c                           $6201.67

(Being notes payable is accepted)

Since, notes is issued and interest is charged so both accounts is debit and cash is gone so it would be credited.

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On January 1, a company purchased a five-year insurance policy for $3,300 with coverage starting immediately. If the purchase wa
marissa [1.9K]

Answer:

a. Debit Insurance Expense. $660, credit Prepaid Insurance, $660.

Explanation:

The adjusting entry is shown below:

Insurance expense Dr $660 ($3,300 ÷ 5 years)

          To Prepaid insurance

(Being the insurance expense is recorded)

here we debited the insurance expense as it increased the expense and credited the prepaid insurance as it decreased the assets

Therefore the option a is correct

7 0
3 years ago
A commercial building with a market value of $200,000 has an insurance policy with an 80 percent coinsurance clause. The owner c
RideAnS [48]

Answer:

$45,000

Explanation:

In this case the market value is $200,000 but the policy limit is only $120,000, with a coinsurance of 80%.

Since the amount of loss = $60,000, the insurance company will pay:

(stop limit / value) x loss = ($120,000 / $160,000*) x $60,000 = 0.75 x $60,000 = $45,000

*the $160,000 value is determined by multiplying the fair market value of the property times the coinsurance = $200,000 x 80% = $160,000

8 0
3 years ago
What is economic unity
NemiM [27]

Answer:

the state of different areas or groups being joined together to form a single country or organization.

Explanation:

4 0
2 years ago
Victorinox is the name of the company that manufactures Swiss army knives. The _____ channel the company utilizes to get its kni
lora16 [44]
Distribution channel is how you products to consumers.
5 0
2 years ago
Read 2 more answers
On May 20, the board of directors for Auction declared a cash dividend of 50 cents per share payable to stockholders of record o
AleksandrR [38]

Answer:

May 20

No Entry

June 14

Dr. Dividends               $255,000

Cr. Dividend Payable  $255,000

July 14

Dr. Dividend Payable  $255,000

Cr. Cash                       $255,000

July 31

Dr. Retained Earnings $255,000

Cr. Dividend                 $255,000

Explanation:

Dividend = $0.5 x 510,000 = $255,000

May 20

Dividend is declared, No entry is required

June 14

Dividend to be recorded on this date. As  dividend is not paid yet so it will be recorded as payable and on the other hand dividend account is debited to make a contra capital account of dividend.

July 14

Dividend is paid as cash is paid so, it will be credited and the liability is reduced so, it will be debited.

July 31

At the end of the period we have to adjust the Dividend Contra capital account in retained earning to make the dividend account zero.

8 0
3 years ago
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