Answer and Explanation:
The journal entries are shown below:
a. Note receivable Dr $3,800,000
To Cash $3,800,000
(Being the acceptance of the note is recorded)
For recording this we debited the note receivable as it increased the assets and credited the cash as it decreased the liabilities
b. Interest receivable Dr $38,000
To Interest revenue $38,000
(Being the interest revenue is recorded)
For recording this we debited the interest receivable as it increased the assets and credited the interest revenue as it increased the revenue
The computation is shown below:
= $3,800,000 × 6% × 2 months ÷ 12 months
= $38,000
,
Answer:
Final value= $2,282.013
Explanation:
Giving the following information:
Erick is planning to invest $500 at the end of year one, 800 at the end of year two, and 900 at the end of year three at 4.5 percent interest.
To calculate the total final value of the investment, we need to use the following formula for each deposit:
FV= PV*(1+i)^n
Deposit 1= 500*1.045^2= 546.013
Deposit 2= 800*1.045= 836
Deposit 3= 900
Final value= $2,282.013
Answer:
a) The effect the rental activity has on Adelene's AGI is $0.
b) The total rental income is less than the total expenses for the year, so the reportable rental income is $0.
Explanation:
a)
particulars amount amount
rental income $5,000
property taxes $3,800
mortgage interest $7,500
utilities $3,700
insurance $2,500
repairs $2,100
depreciation $15,000
total deduction $34,600
AGI $0
Therefore, The effect the rental activity has on Adelene's AGI is $0.
b)
particulars amount
Real property taxes $3,800
mortgage interest $7,500
utilities $3,700
insurance $2,500
repairs $2,100
depreciation $15,000
total expenses $34,600
Therefore, The total rental income is less than the total expenses for the year, so the reportable rental income is $0.
Answer:
A) Both the present value and future value would increase.
Explanation:
If the compounding frequency increases, then both the present value and the future value will increase because the effective annual rate will increase. E.g. interest used to be compounded every 6 months, now it is compounded monthly.
Both the present value and the future value vary jointly, if the present value decreases, then the future value will also decrease, and vice versa.