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horrorfan [7]
3 years ago
7

On January 1, Year 1, Barrett, Inc., purchased equipment and signed a note agreeing to pay $100,000 on December 31, Year 3. The

market interest rate applicable to the note was determined to be 10%. What is the amount that will be credited to Note Payable in the journal entry dated January 1, Year 1?
Business
1 answer:
Afina-wow [57]3 years ago
3 0

Answer:

$75,131

Explanation:

The computation of the amount of note payable credited is shown below:

Notes payable is

= Agreed amount to pay × present value factor at 10% for 3 years

= $100,000 ×  0.75131

= $75,131

By multiplying the agreed amount to pay with the present value factor at 10% for 3 years we can get the amount credited to the note payable

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Alice and Bob entered into a forward contract some time ago. Alice has the long position, while Bob has the short position. The
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Answer:

$ - 1.96

Explanation:

After three months, Alice (long the contract) can buy the underlying by paying the delivery price of $40 which is $2 less than $42 the long position would have to pay if the contract was entered today.

DATA

Delivery price = $40

The three-month risk-free interest rate (with continuous compounding) =8%.

The current forward price = $42

Solution

So based on the present situation, Alice would be in $2 profit at the end of 3 months and Bob would be in $2 loss

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6 0
4 years ago
1. On March 1, a business paid $3,600 for a twelve month liability insurance policy. On April 1 the same business entered into a
babunello [35]

Answer:

a $300

b $3,300

c $750

d $17,250

Explanation:

The computation is shown below:

a. Insurance expense for march month:

= Total insurance expense ÷ total number of months in a year

= $3,600 ÷ 12 months

= $300

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= $3,600 - $300

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= $750

d. Prepaid rent expense

= Total rent cost - April rent expense

= $18,000 - $750

= $17,250

8 0
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N a mixed market economy, which of these would most likely be considered a basic function of government?
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D) to correct market failures and redistribute income

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Joyce paid $144.00 for an item at the store that was 40 percent off the original price. what was the original price?
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144 \div 40 \times 100 = 360
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3 years ago
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