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SOVA2 [1]
3 years ago
14

On Kyle Thomason’s $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to

pay for this service charge at closing, and how would such a charge appear on the statement?
a) $800.00, as a debit to the buyer.
b) $8,000.00 as a credit to the buyer.
c) $8,000.00 as a debit to the buyer.
d) $80,000.00 debit to the buyer.
Business
2 answers:
bearhunter [10]3 years ago
6 0

Answer:

The answer is C

Explanation:

This is an interest expense.

In accounting, the rule is as follows:

Debit side increases asset and expenses while credit side decreases liability, shareholders' equity and sales or revenue.

Credit side decreases asset and expenses while credit side increases liability, shareholders' equity and sales or revenue.

2 points on $400,000 means the interest charge is 2 percent on $400,000.

So we have 0.02 x $400,000

$8,000.

It will be a debit side because it is an increase in expense.

likoan [24]3 years ago
5 0

Answer:

c) $8,000.00 as a debit to the buyer.

Explanation:

Point is referred to the percentage of anything. 1 point means 1%. 2 point service charges mean 2%of service charges of the total amount.

Amount of Loan = $400,0000

Service charges rate = 2 points / 2%

Service charges = $400,000 x 2% = $8,000

Service charges amount is paid by Kyle is an expense which is shown as debit as an expense

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RGDP in the United States has grown at an average annual rate of 3% in the last couple of decades. If the RGDP annual growth rat
Natali [406]

Explanation:

i=interest rate

X=current rate

2X = double current rate

n = number of years

Calculate time it takes to double at 3%:

2X = X(1+i)^n

simplify by cancelling out X

(1+i)^n = 2

substitute i = 3%

(1.03)^n =2

take log

n*log(1.03)  = log(2)

n = log(2)/log(1.03) = 0.6931/0.02956 = 23.45 years

Similarly, for growth rate of 7%,

n = log(2)/log(1.07) = 0.6931 / 0.06766 = 10.24 years

So the difference is 23.45-10.24 = 13.21 years (to the hundredth)  sooner

3 0
3 years ago
Hunt Incorporated sold $209,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% fin
pentagon [3]

Answer:

Dr Cash $190,190

Dr Due from Gannon Factors $14,630

Dr Loss on Sale of Receivables $16,280

Cr Accounts Receivable $209,000

Cr Recourse Liability $12,100

Dr Accounts Receivables $209,000

Cr Due to Customer $14,630

Cr Interest Revenue $4,180

Cr Cash $190,190

Explanation:

Journal entries

Dr Cash $190,190

Dr Due from Gannon Factors $14,630

Dr Loss on Sale of Receivables $16,280

Cr Accounts Receivable $209,000

Cr Recourse Liability $12,100

Dr Accounts Receivables $209,000

Cr Due to Customer $14,630

Cr Interest Revenue $4,180

Cr Cash $190,190

*7% X $209,000 =$14,630

*2% X $209,000 =$4,180+$12,100=$16,280

5 0
3 years ago
For each of the following independent events, identify the account that would be debited and the account that would be credited.
My name is Ann [436]

Answer:

A. Received cash by issuing common stock

Debit: Cash

Credit: common stock

B. Received cash for services to be performed in the future.

Debit: Cash

Credit: unearned revenue.

C. Paid salaries payable

Debit: salaries payable

Credit: cash

D. Provided services on account.

Debit: accounts receivable

Credit: service revenue

E. Paid cash for operating expenses

Debit: operating expenses

Credit: cash

Explanation:

A. Received cash by issuing common stock

Debit: Cash

Credit: common stock

B. Received cash for services to be performed in the future.

Debit: Cash

Credit: unearned revenue.

C. Paid salaries payable

Debit: salaries payable

Credit: cash

D. Provided services on account.

Debit: accounts receivable

Credit: service revenue

E. Paid cash for operating expenses

Debit: operating expenses

Credit: cash

6 0
3 years ago
The issuance of common stock and declaration and payment of cash dividends will result in the following:
jeka94

Answer: a. Increase in financing activities for the issuance and a decrease in financing activities for the dividends.

Explanation:

When using the Indirect method of the Cash Flow Statement, you will find 3 sections namely, the Operating Activities, Investing Activities and Financing Activities.

The Operating Activities deal with the normal business Transactions and related entries that keep the business running.

Investing Activities have to do with entries related to Non Current Assets as well as stocks and bonds in other companies.

The above relates to the Financing Section that handles the raising of Capital needed to run the business. They include long term debt and Equity.

When new Equity is announced it is a Cash inflow for the business meaning that there will be an INCREASE in Financing Activities.

Dividends have the effect of reducing Equity so it is a Cash Outflow. This means that there will be a DECREASE in Financing Activities as a result of the declared Dividends.

8 0
3 years ago
Archie and Tina Reynolds are married and always file Married Filing Jointly.
Leni [432]

Based on the information given, it can be noted that the child that qualifies for the will be Laura.

<h3>What Is Tax Credit?</h3>

A tax credit simply means an amount of money that a taxpayer is expected to deduct from the tax that will be paid.

In this case, it can be noted that the child that qualifies for the tax credit will be Laura. Timothy isn't a qualifying child because he has turned 17.

In conclusion, the clause is typically for children below 17 years.

Learn more about tax on:

brainly.com/question/17395659

7 0
3 years ago
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