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Ksju [112]
3 years ago
13

On July 1, 2008, Sheeley Company pays $8,000 to its insurance company for a 2-year insurance policy.InstructionsPrepare the nece

ssary journal entries for Sheeley on July 1 and December 31.
Business
1 answer:
Readme [11.4K]3 years ago
3 0

Answer:

Debit Prepaid insurance  $8,000

Credit Cash account         $8,000

Being entries to recognize prepaid insurance as at July 1 , 2008

Debit Insurance expense $2,000

Credit Prepaid Insurance $2,000

Being entries to recognize insurance expense as at December 31.

Explanation:

The amount paid by Sheeley Company On July 1, 2008 is a prepayment (an asset) as it is paid in advance. The insurance cover was yet to be enjoyed as at that date.

Entries required to recognize this payment

Debit Prepaid insurance  $8,000

Credit Cash account         $8,000

Being entries to recognize prepaid insurance as at July 1 , 2008

As at 31 December, the company would have incurred expenses for 6 months out of the 24 months (2 years) paid for.

This amounts to

= 6/24 × $8,000

= $2,000

To recognize this by December 31

Debit Insurance expense $2,000

Credit Prepaid Insurance $2,000

Being entries to recognize insurance expense as at December 31.

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Selma owns a roofing business. She enjoys being her own boss, but her satisfaction comes at a price. Her days are filled with or
Basile [38]

Answer:

D. Sole proprietorship.

Explanation:

We know it's definitely is a sole proprietorship because of 'unlimited personal liability' which is a key characteristic.

Selma's business is not a joint venture because she is the only person who invested and runs the business whereas a joint venture is created by two or more entities or 'shared ownership'

Nor is it a corporation for this is an 'organization' owned and manned by many people but is regarded as a single entity. Neither is her business an s corporation because that just the same as a corporation but just with different tax regulations.

3 0
3 years ago
The accompanying graphs depict the market for bags of potato chips, which is currently at an equilibrium price of $1.67 per bag
Sergeeva-Olga [200]

Answer:

Equilibrium is the point of the interaction between the demand and supply curves.

The given graph given from the question is attached below (Image 1-2)

The solution is attached in image 3-4

6 0
3 years ago
issues new bonds to fund an acquisition. The face value of the bond is $100 and annual coupon is 6.5%. Further, this bond mature
grandymaker [24]

Answer:

KJ Pharma Corporation

KJ Pharma's after-tax cost of debt is:

= 4.55%.

Explanation:

a) Data and Calculations:

Face value of the bond = $100

Annual coupon rate (cost of debt) = 6.5%

Maturity period of bond = 20 years

Tax rate = 30%

After-Tax Cost of Debt = 6.5 (1 - 0.3)

= 4.55%

b) KJ Pharma's after-tax cost of debt is the interest paid on the bond less any income tax savings accounted for as deductible interest expenses. To calculate the after-tax cost of debt, KJ subtracts the company's effective tax rate from 1 and multiplies the difference by its cost of debt.

7 0
2 years ago
Asset distribution analysis provides a better understanding of how the community functions and how it addresses the public healt
kumpel [21]

Answer:

False

Explanation:

Based on the information provided within the question it can be said that this statement is False. The term that actually provides a better understanding of this is Community Needs Assessment: Purpose, since the main goal of the community needs assessment is to meet the needs of children, youth, and families by identifying the strengths and resources available in the community.

6 0
3 years ago
Bond A and Bond B both have 16 years to maturity and a face value of $1,000. Bond A has a 2.50% coupon while Bond B has a 5.5% c
r-ruslan [8.4K]

Answer:

Bond's A price will decrease by 27.09%

Bond's B price will decrease by 24.25%

Explanation:

Bond's A current price: should be 1,000, since he market price = coupon rate

Bond's B current price: using an excel spreadsheet we can calculate the net resent value: =NPV(2.5%,55... fifteen times,1055) = $1,391.65

If the market rate increases to 5%

Bond's A current price: using an excel spreadsheet we can calculate the net resent value: =NPV(5%,25... fifteen times,1025) = $729.06

Bond's B current price: using an excel spreadsheet we can calculate the net resent value: =NPV(5%,55... fifteen times,1055) = $1,054.19

Bond's A price will decrease by: [($729.06 - $1,000) / $1,000] x 100 = -27.09%

Bond's B price will decrease by: [($1,054.19 - $1,391.65) / $1,391.65] x 100 = -24.25%

3 0
3 years ago
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