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KIM [24]
3 years ago
14

On January 1, Year 1, Barnes Company issued a $100,000 installment note. The note had a 10-year term and an 8 percent interest r

ate. Barnes agreed to repay the principal and interest in 10 payments of $14,903 at the end of each year. Which of the following shows the journal entry necessary to recognize the cash payment on December 31, Year 1? Note: the amounts shown in the journal entries are rounded to the nearest whole dollar.(A) debit: interest expense $8,000; notes payable $6,903; credit: cash $14,903(B) debit: interest expense $8,000; cash $6,903; credit: notes payable $14,903(C) debit: interest expense $14,903; credit: cash $14,903(D) debit: notes payable $14,903; credit: cash $14,903
Business
1 answer:
Svetach [21]3 years ago
5 0

Answer:

(A) debit: interest expense $8,000; notes payable $6,903; credit: cash $14,903

Explanation:

Provided annual payment = $14,903

Interest for first year = $100,000 \times 8% = $8,000

Therefore principal = $14,903 - $8,000 = $6,903

When the cash payment will be made, then

Interest as an expense amounting $8,000 will be debited as all expenses and losses are debited.

Principal payment of notes issued will also be debited, as this was liability and a part of liability is settled therefore, it will be reversal of creating liability that is debit by amount of $6,903

Also there is cash payment therefore, because of cash payment asset will be decreased, cash account will be credited by amount = $14,903

Journal Entry

Interest Expense Dr. $8,000

Notes Payable Dr. $6,903

               To Cash A/c                     $14,903

Therefore correct option is

(A) debit: interest expense $8,000; notes payable $6,903; credit: cash $14,903

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Your customer, age 68, that has an IRA account at your firm valued at $500,000, passes away. The customer leaves the account to
schepotkina [342]

Answer:

He should roll the funds over into a new IRA in the spouse's name

Explanation:

Since the son is expects to retire in 22 years, in which at that time he will be in need of the funds to pay for his or his Family annual living expenses the best advice I would give the son is for him to roll all the funds over into a new IRA in the name of spouse's because the IRA Account which is fully known as INDIVIDUAL RETIREMENT ACCOUNT is an individual retirement plan that can help to provides all tax the advantages that an individual needs for their retirement savings.

5 0
3 years ago
If during 2011 the Republic of Sildavia recorded a value added of $78 billion, wages of $40 billion, profits of $8 billion, and
Otrada [13]

Answer:

$12 billion.

Explanation:

Given: Value added during 2011= $78 billion.

           Total sales= $90 billion.

Intermediate goods are the goods used to produce final product and it is not included in the calculation of GDP, however, it is included in the value of final goods.

Now, finding the value of intermediate goods purchased.

Intermediate goods= Total\ sales - Total\ value\ added

⇒ Intermediate goods= \$ 90\ billion - \$ 78 \ billion

∴ Intermediate goods= \$ 12\ billion

Hence, value of intermediate goods purchased is $12 billion.

7 0
3 years ago
Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, I
Arisa [49]

Answer:

15.4%

Explanation:

Calculation to determine your best guess for the rate of return on the stock

The revised estimate on the rate of return on

the stock would be:

Before

14% = α +[4%*1] + [6%*0.4]

α = 14% - 6.4%

α = 7.6%

With the changes:

7.6% + [5%*1] + [7%*0.4]

= 7.6% + 5% + 2.8%

= 15.4%

Therefore your best guess for the rate of return on the stock will be 15.4%

3 0
3 years ago
StayWell Health Insurance is offering a plan with a monthly premium of $250, a
VARVARA [1.3K]

The most Sheldon should pay in one calendar year is $9,750

Deductible is a term used in Insurance. The amount of deducible refrain the Insurer from liability until a certain level of liability is reached.

Given that :

Premium = $250

Deductible = $3500

Maximum out-of-pocket expenses = $6000.

Then, the maximum he should pay in one calendar year is:

= $250 + $3,500 + $6,000

= $9,750

Therefore, the maximum he should pay in one calendar year is $9,750

Learn more about insurance plan here : brainly.com/question/25676329

4 0
2 years ago
The risk premium for exposure to aluminum commodity prices is 4%, and the firm has a beta relative to aluminum commodity prices
Kitty [74]

Answer:

C.13.6 percent

Explanation:

         GDP   Market   STOCK      

ER    7,2% 2,4% 13,6% Expected Return of Investment    Rf                                  4,00% Risk-Free Rate    

Bi      1,2     0,6     1,0     Beta of the Investment    

(Erm-Rf) 6,00% 4,00% 9,60% Market Risk Premium    

It's necessary to calculate how much impact each item has with the corresponding Beta in the stock  

Then, to know the impact of exposure to the Aluminum market, we have to multiply the risk premium of 4% by the beta of 0,6  

Then, to know the impact of the exposure to GDP, we do the same procedure, we multiply the risk premium of GDP by the beta of 1,2.    

With these calculations we reach how much of the return on this stock corresponds to the market and then we add 4% of risk free.  

6 0
2 years ago
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