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Drupady [299]
3 years ago
9

Shaw Industries purchased a large piece of equipment from Charles Company on January 1, 2014. Shaw industries signed a note, agr

eeing to pay Charles Company $400,000 for the equipment on December 31, 2016. The market rate of interest for similar notes was 8%. The present value of $400,000 discounted at 8% for three years was $317,520. On January 1, 2014, Shaw Industries recorded the purchase with a debit to equipment for $317,520 and a credit to notes payable for $317,520. On December 31, 2014, Shaw recorded an adjusting entry to account of interest that had accrued on the note. Assuming no adjusting entries have been made during the year, the interest expense accrued at December 31, 2014 is closest to:
Business
1 answer:
andrezito [222]3 years ago
6 0

Answer:

Interest expense for the year: 25,401.6

Explanation:

Carrying value of the note x 8% = interest on note payable

317,520 x 8% = 25,401.6

The interest expense will be for this amount

And the journal entry will be as follow

Interest Expense 25,401.6

   Note Payable                      25,401.6

As the note is discounted, we will recognize interest until maturity against the note, so it reach their face value at maturity.

Because this interest won't be exigible until maturity, they are accrued interest but do not invovle a cash disbursmement for the period.

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____ emphasized designing and managing organization on an impersonal, rational basis through such elements as clearly defined au
AURORKA [14]

Answer:

bureaucratic organizations

Explanation:

Bureaucratic organizations -

It is a form of management with a pyramidal command structure , it is a very organized form of management , having formality , is known as bureaucratic organisations .

They are the one with high efficiency with strict control and command .

hence ,

The correct term for the given statement is  bureaucratic organizations .

7 0
3 years ago
Which of the following can be classified as data flow for a book store?
marishachu [46]
<span>C.) The amount of money earned in a week being invested in new book purchase

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5 0
3 years ago
A note payable was issued in payment for services received. The services had a fair value less than the face amount of the note
Leokris [45]

Answer:

The note payable will be presented in the financial statement at the face amount minus a discount calculated at the imputed interest rate.

Explanation:

The imputed rate is the rate at which the present value of the face amount of the note will be equal to the amount at which it is originally recorded.  

Notes issued or received in exchange for goods or services that do not bear interest at a fair rate are reported at an amount equal to the fair value of the note, the fair value of the goods or services, or the present value of the note using a fair interest rate, whichever is more readily determinable.  

The difference between the recorded amount and the face value is considered a discount and the applicable interest rate regardless of which method is used to value the note.

Because of this, the note is reported at its face amount minus a discount calculated at the imputed interest rate.

3 0
3 years ago
Sales promotions that provide consumers an incentive to buy a product, such as a cents-off coupons or a discount, are widely use
Nady [450]

Answer:

it is challenging to track usage of the coupons

Explanation:

Coupons are defined as an instrument that is used to obtain a discount or rebate when making a purchase.

Stores usually give out coupons to customers as an incentive to by products.

However there will be challenge of tracking the coupons as well as the discount on each coupon.

Coupons are given at different discount rates at different times, so it is cumbersome to track a particular coupon out of the many issued when customer wants to redeem it

6 0
2 years ago
If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares of $5 par value common stock,
Vinvika [58]

Answer:

Explanation:

The journal entry is shown below:

Bonds payable A/c Dr $60,000

Premium on bonds payable A/c Dr $10,000

           To Common stock A/c $45,000

           To Paid in capital in excess of par A/c $25,000

(Being the conversion of bonds is recorded)

The computation is shown below:

For bonds payable

= sixty $1,000 convertible bonds

That means

= 60 × $1,000

= $60,000

For Premium on bonds payable:

= $70,000 - $60,000

= $10,000

For Common stock:

= 9,000 shares × $5

= $45,000

And, the remaining balance is credited to paid in capital in excess of par

6 0
3 years ago
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