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joja [24]
3 years ago
13

Flipco signed a 10-year note payable on January 1, 2016, of $800,000. The note requires annual principal payments each December

31 of $80,000 plus interest at 5%. The entry to record the annual payment on December 31, 2017, includesa. a debit to Interest Expense for $36,000.b. a debit to Interest Expense for $40,000.c. a credit to Notes Payable for $80,000.d. a credit to Cash of $120,000.
Business
1 answer:
nekit [7.7K]3 years ago
7 0

Answer:

a debit to Interest Expense for $36,000

Explanation:

Data provided in the question

Note payable amount = $800,000

Interest payment = $80,000

Interest rate = 5%

So, the amount is

= (Note payable amount - interest expense) × interest rate

= ($800,000 - $80,000) × 5%

= $720,000 × 5%

= $36,000

This amount would be debited to interest expense while recording the annual payment on December 31, 2017

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The current highest interest rate on a savings account is 1.85%. the current rate of inflation is 1.9%. what is the real dollar
adoni [48]

Answer: 0.51

Explanation:

Nominal rate = 1.85%

Inflation rate = 1.90%

Real rate of return = (1 + nominal rate / 1 +inflation rate) - 1

Real rate of return = ((1 + 0.0185) / (1 + 0.019)) - 1

= (1.0185 / 1.019) - 1

= 0.9995 - 1 = - 0.0005

Therefore, the real dollar return I. $1,020 equals

0.0005 × 1020 = 0.51

3 0
3 years ago
Eager, a tipped employee, reported to his employer that he had received $320 in tips during March. On the next payday, April 4,
Sphinxa [80]

Answer:

Amount of OASDI taxes to withhold = $35.34

Explanation:

Find:

Amount received in march = $320

Amount of salary = $250

Find:

Amount of OASDI taxes to withhold .

Computation:

OASDI tax rate = 6.2%

Total amount = Amount received in march + Amount of salary

Total amount = $320 + $250

Total amount = $570

Amount of OASDI taxes to withhold = Total amount × OASDI tax rate

Amount of OASDI taxes to withhold = $570 × 6.2%

Amount of OASDI taxes to withhold = $35.34

5 0
3 years ago
The adjusting entry to adjust supplies was omitted at the end of the year. This would affect the income statement by having expe
creativ13 [48]

Answer:

This would affect the income statement by having expenses

c. understated and therefore net income overstated revenues

Explanation:

Adjusting Entry:

It is such entry which is added at the end of the fiscal period in order to make the income statement accurate.

Overstated:

In Accounting, overstated amount means that amount is greater than the true amount.

Understated:

In Accounting, if an amount is less than the true amount then it is known as understated.

  • As in our case, the adjusting entry for supplies was not added so in this way expenses became understated means they become less as compared to actual expenses. Therefore, revenues overstated.

5 0
3 years ago
Read 2 more answers
On January 1, 2018, M Company granted 90,000 stock options to certain executives. The options are exercisable no sooner than Dec
hram777 [196]

Answer:

$120,000

Explanation:

Given that,

stock options = 90,000

Each option can be exercised to acquire one share of $1 par common stock for $12.

Total Value of the option = stock options × fair value of the options

                                          = $90,000 × $5

                                          = $450,000

company to estimate that 10% of the options would be forfeited, so,

= 90% of Total Value of the option

= 0.9 × $450,000

= $405,000

2 out of 3 years = $405,000 × 2/3

                           = $270,000

=\frac{Total\ value\ of\ the\ options}{no.\ of\ years}

=\frac{450,000}{3}

= $150,000

Compensation expense (2019) = $270,000 - $150,000

                                                    = $120,000

6 0
3 years ago
You are trying to listen to instructions your boss is giving you about a new method for keeping expense accounts. But you find i
alexandr402 [8]

Answer:

Psychological barrier

Explanation:

The type of barrier that you are experiencing is psychological. Psychological barriers result when your personal values are not aligned with the message being received, be it by cultural or ethical values or even by preconceived thoughts. In this situation, since you do not agree with the task at hand of changing the method for keeping the accounts, you find it difficult to focus on the task.

5 0
3 years ago
Read 2 more answers
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