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ale4655 [162]
3 years ago
6

On July 1, Alaskan Adventures issues a $120,000, eight-month, 6.5% note. Interest is payable at maturity. What is the amount of

interest expense that the company would record in a year-end adjustment on December 31
Business
1 answer:
xz_007 [3.2K]3 years ago
8 0

Answer:

December 31  Interest expense       $3900 Dr

                           Interest Payable            $3900 Cr

Explanation:

The interest and principal is both payable at maturity thus we need to accrue the interest payment and create a liability against the amount of interest due. The adjustment is made 6 months from the issue of the note thus the interest for 6 months is due. The entry would be to record 6 month's interest that relates to this year. The interest expense will be,

120000 * 0.065 * 6/12 = $3900

As the payment is not made until maturity we will credit interest payable by this amount.

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What are the costs and consequences of providing and to whom
tia_tia [17]
Providing "and to whom" can be risky because it does not specify an exact name, and anybody who is in that position at a later time, can be affected by whatever is being referred.
4 0
3 years ago
Larson Company on July 15 sells merchandise on account to Stuart Co. for $1,000, terms 2/10, n/30. On July 20 Stuart Co. returns
pickupchik [31]

Answer:

b. $588

Explanation:

Terms 2/10, n/30 means that 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

When Larson Company sold merchandise, the following entry was made to recording revenue (sales) and the receivable:

Debit Receivable Account $1,000

Credit Revenue $1,000

On July 20 Stuart Co. returns merchandise, the entry is made to record the decreasing of Receivable Account:

Debit Revenue $400

Credit Receivable Account $400

The balance Receivable Account of Stuart Co. = $1000-$400 = $600

On July 24, Stuart Co. makes the payment, the sales discount was:

$600 x 2% = $12

The amount of cash received = $600-$12=$588

The following entry is made:

Debit Cash: $588

Debit Sales discount: $12

Credit Receivable Account $600

7 0
3 years ago
In the late 1970s Federal Reserve Chairman Paul Volcker contracted the money supply to reduce the rate of inflation. One result
xxTIMURxx [149]

Answer: to increase interest rates which reduced aggregate demand.

Explanation:

Since the money supply was contracted to reduce the rate of inflation, this will lead to increase interest rates which reduced aggregate demand.

In this case as a result of the increase in the interest rate, people will prefer to save their money in the banks and thus will result in less money in circulation which ultimately reduces the demand for goods and services.

8 0
2 years ago
When businesses collect demographic information on where people live, what they buy, and how they spend their time, they are res
snow_tiger [21]

Answer:

Social environment.

Explanation:

When businesses collect demographic information on where people live, what they buy, and how they spend their time, they are responding to the social environment. The social environment comprises of values, beliefs, practices, customs and behaviors of a group of people living together in a society and how their actions influence their surroundings or environment.

Demographics can be defined as the study and analysis of the characteristics of a population based on pre-defined factors such as education, race, income, sex or gender, and age.

Additionally, businesses gather, analyze and use demographic informations about people in the target market so as to have a competitive edge or advantage and to help build a strong relationship.

7 0
3 years ago
Round 8.35 to the nearest whole number
Lelechka [254]
8.35=8
Any decimal point below 5 is rounded down; above 5 is rounded up
Ex: 10.6=11
Hope this helps!
5 0
3 years ago
Read 2 more answers
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