Answer:
3 1/3 years
Explanation:
Payback period is the time required for the inflows from a project to be equal to the initial outflow for the project. It is a key consideration in capital budgeting. It is usually assumed that the outlay or initial outflow is made in year 0 and the first inflow comes in after a year.
Year Cash outflow Cash inflow Balance
0 ($50,000) - ($50,000)
1 - $15,000 ($35,000)
2 - $15,000 ($20,000)
3 - $15,000 ($5,000)
4 - $15,000 $10,000
5 - $15,000 $25,000
Hence the payback period
= 3 years and 5000/15000 * 12 months
= 3 years 4 months
= 3 1/3 years
Answer:
make an adjusting entry to debit Interest Receivable and to credit Interest Revenue for the amount of interest accrued since the last interest receipt date.
Explanation:
Adjusting entries are used at the end of an accounting period to assign income and expenses that has accrued.
In this instance when the interest reciept day comes after accounting period we need to recognise the amount of interest earned so far.
The amount accrued since last interest payment date is calculated.
This amount has been earned so it should be recognised as revenue. To do this we debit interest receivable and credit interest revenue.
When I don't have money and I know that I can pay in future, if I am not sure that I can pay in future it's not worth full to take loan
