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myrzilka [38]
3 years ago
7

OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the

airline industry. Assume that on July 1 the company issues a one-year note for the amount of $6 million. Interest is payable at maturity.
Required:

Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions:

Interest Rate Fiscal Year-End
11% December 31
9% September 30
10% October 31
7% January 31
Business
1 answer:
Sindrei [870]3 years ago
3 0

Answer:

a. Interest expense to be recorded at December 31 at 11% is $330000.

b. Interest expense to be recorded at September 30 at 9% is $135000.

c. Interest expense to be recorded at October 31 at 10% is $200000.

d. Interest expense to be recorded at January 31 at 7% is $245000.

Explanation:

a.

The year end adjusting entry will be made on the accrual basis and will match that period's expenses with revenues. The note will pay interest at maturity however it will continue to accrue interest throughout its outstanding period evenly.

Considering year end to be on December 31 and 11% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.11 * 6/12 = $330000

b.

Considering year end to be on September 30 and 9% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.09 * 3/12 = $135000

c.

Considering year end to be on October 31 and 10% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.10 * 4/12 = $200000

d.

Considering year end to be on January 31 and 7% interest on note, the interest expense that would be recorded in year end adjusting entry will be,

Interest expense = 6000000 * 0.07 * 7/12 = $245000

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Answer:

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2 years ago
Gdp is $8 trillion. if consumption is $5 trillion, investment is $1 trillion, and government purchases are $2 trillion, then:___
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Exports are equal to imports when Gdp is $8 trillion. if consumption is $5 trillion, investment is $1 trillion, and government purchases are $2 trillion

Given -

Gross Domestic Product = $8 trillion

Consumption Spending = $5 trillion

Investment Spending = $1 trillion

Government Purchases = $2 trillion

The GDP is calculated as follows -

Gross Domestic Product = Consumption + Investment + Government Purchases + Net Exports

Since other components are given, net exports can be calculated.

Net Exports = Gross Domestic Product - Consumption - Investment - Government Purchases

Net Exports = 8 - 5 - 1 - 2

Net Exports = 0

Therefore, Exports are equal to Imports

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4 0
1 year ago
You are the marketing research director of a medium-sized manufacturing firm and you would like to engage an outside marketing r
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What is the total of the owner's equity if the balance sheet shows liabilities of $38,000 and assets of $74,000?
horrorfan [7]

Answer:

The total of the owner's equity is $36,000

<h3>Explanation:</h3>

Total Asset = Total Liability + Total Equity.

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1 year ago
Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2016, that pay interest semiannually on June 30 and December 31
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Answer:

(DR) Cash $4,895,980; (CR) Bonds Payable $4,000,000; (CR) $895,980

Explanation:

The problem only requires the journal entry of the issuance of the bonds on January 1, 2016.

Simply <u>debit "Cash"</u> for the amount of the price which is $4,895,980.

Then <u>ALWAYS credit "Bonds Payable"</u> on its issued value of $4,000,000.

Now, since the cash price is greater than the issued value, the difference of $895,980 will be called as "Premium on Bonds Payable" and it will be credit.

So the entry would look like this:

(DR)      Cash                   $4,895,980

(CR)           Bonds Payable                      $4,000,000

(CR)           Premium on Bonds Payable    $895,980

4 0
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