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Tanya [424]
3 years ago
8

New-Tech Corporation borrowed $20,000 from the bank on March 1, 2011. The note carried a 9% annual interest rate and a 1-year te

rm to maturity. The company paid the principal and the interest in cash on the maturity date. What amount of interest expense will New-Tech Corporation show on its 2011 and 2012 income statements? 2011 2012 a $ -O- $1,800 b. $1,800 $ -O- $1,500 $ 300 d. $1,350 $ 450
Business
1 answer:
faust18 [17]3 years ago
8 0

Answer:

The correct answer is:

$ -O- $1,800 (a)

Explanation:

Principal = Amount borrowed = $20,000

interest rate = 9% = 0.09

Time = 1 year

Simple Interest = Principal × Rate × Time

Simple Interest = 20,000 × 0.09 × 1 = $1,800.

Next, we are asked to show how interest expense will appear  in 2011 and 2012 income statements respectively. First note that the 2011 interest expense will be recorded as $0 because that was the year in which the money was borrowed, and it was not paid back until 2012. In 2012, the interest and principal was paid back, and from the calculation, the interest paid was $1,800.

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Alex_Xolod [135]

Answer:

Income tax expense (Balancing figure) $13,200,000  

          To Deferred tax liability (8% × $15,000,000)  $1,200,000

          To Income tax payable ($30,000,000 × 40%)  $12,000,000

(Being the income tax expense is recorded)

Explanation:

The compound journal entry is shown below:

Income tax expense (Balancing figure) $13,200,000  

          To Deferred tax liability (8% × $15,000,000)  $1,200,000

          To Income tax payable ($30,000,000 × 40%)  $12,000,000

(Being the income tax expense is recorded)

For recording this, we debited the income tax expense as it increased the expenses and at the same time it also increased the liabilities i.e deferred tax liability and income tax payable so it would be credited

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Reil [10]

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Explanation:

I tried the best I could.

8 0
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Angelina_Jolie [31]

Answer:

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Explanation:

The Monetary Base is made up of all legal money in circulation (that is, bills and coins), added to the reserves of commercial banks in the central bank. In other words, it is the legal money issued by the Central Bank of a country and can be in the hands of the public, or else in the cashier of the different commercial banks that the financial sector of the country. The monetary base is monitored by the central bank and constitutes its main way to control the money supply. Also another way to define the monetary base is that they constitute the monetary liabilities of the central bank.

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This method basically ranks employees from the very best to the worst based on a particular trait. Choosing the highest down to the lowest until every one of them are ranked.

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