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jeka94
3 years ago
12

Jasper makes a $45,000, 90-day, 6.5% cash loan to Clayborn Co. Jasper's entry to record the collection of the note and interest

at maturity should be: (Use 360 days a year.) Multiple Choice:
a. Debit Notes Payable $45,000; Debit Interest Expense $2,925; credit Cash $47,925.

b. Debit Cash $45,731.25; credit Notes Receivable for $45,731.25.

c. Debit Cash $45,731.25; credit Interest Revenue $731.25; credit Notes Receivable $45,000.

d. Debit Cash $47,925; credit Interest Revenue $2,925, credit Notes Receivable $45,000.

e. Debit Cash for $45,000; credit Notes Receivable $45,000.
Business
1 answer:
Mice21 [21]3 years ago
5 0

Answer:

The entry should be:

c. Debit Cash $45,731.25; credit Interest Revenue $731.25; credit Notes Receivable $45,000

Explanation:

Jasper makes a cash loan to Clayborn Co.. This is a Notes Receivable of Jasper.

The amount of the loan is $45,000

Tern of the loan is 90-day and interest rate is 6.5%

The interest amount Jasper receives on maturity date:

$45,000 x 6.5% x 90/360 = $731.25

The entry should be:

Debit Cash $45,731.25

Credit Interest Revenue $731.25

Credit Notes Receivable $45,000

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(a) Imagine a "stream" to mean the flow of the product from the inception of the idea to the sale of the final output. Therefore, upstream and downstream costs are those are those that club various segments of cost during the manufacturing & selling process on the basis of when the cost is incurred in this cycle. Up-stream costs include the costs incurred before the beginning of the manufacturing process. Therefore, product design, structuring of packaging, R&D are all considered upstream costs. Downstream costs are incurred during the production process and the subsequent sale and customer service expenses. In the context of the question, Upstream costs for Fanning Manufacturing would be R&D expenses. Downstream cost include Manufacturing costs, packaging, shipping, and sales commission.

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Cost of Goods Sold                                         (26,862,000.00)

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Research & Development                                (64,400,000.00)

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Note: <u>Again, this is assuming no other income and expenses. Since interest and tax expenses are assumed to be zero, operating income is equal to net income</u>

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