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sleet_krkn [62]
3 years ago
12

On August 1, 2017, a company borrowed cash and signed a one-year interest-bearing note on which both the face value and interest

are payable on August 1, 2018. How will the note payable and the related interest be classified in the December 31, 2017, balance sheet?
Note Payable Interest Payable
Line 1 Current liability Long-term liability
Line 2 Long-term liability Current liability
Line 3 Current liability Current liability
Line 4 Long-term liability Long-term liability

a. Line 4
b. Line 1
c. Line 2
d. Line 3
Business
1 answer:
mezya [45]3 years ago
7 0

Answer:

d. Line 3

Explanation:

Generally, the liabilities are classified as current and long term based on their duration, on the date of issue of notes payable the liability is long as the period is of 1 year, whereas generally notes payable are not for 1 year and are termed as short term i.e. current liabilities.

But, on 31 Dec 2017 the period to pay the notes payable and the interest thereon is just of 7 months left, therefore on the balance sheet date both the liabilities will be considered and clarified as Current Liabilities.

Therefore, correct option is

d. Line 3

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Jessica purchased a home on January 1, 2018 for $580,000 by making a down payment of $230,000 and financing the remaining $350,0
Ann [662]

Answer:

$32,600

Explanation:

Calculation to determine her itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard

Using this formula

Itemized deduction =(Financing amount * 6 percent)+(Additional amount borrowed*interest rate of 8 percent)

Let plug in the formula

Itemized deduction=( $350,000 * 6 percent)+($145,000 *8 percent)

Itemized deduction=($21,000+$11,600)

Itemized deduction=$32,600

Therefore her itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard wi be $32,600

5 0
3 years ago
Beachside Coffee Shop, in an effort to streamline its accounting system, has decided to utilize a cash receipts journal in its o
Kisachek [45]

Answer:

the available options for the question are,

A. Cash Cr. $18, Food Revenue Dr. $18,

B. Cash Dr. $18, Food Revenue Dr. $18

C.Cash Dr. $18, Food Revenue Cr. $18

D. Cash Cr. $18, Food Revenue Cr. $18

and the correct answer is C.Cash Dr. $18, Food Revenue Cr. $18

Explanation:

the answer is simple. once they implement the accounting system, all the transaction will have at least a double entry.

when a cash sale is made for $18, this is a revenue stream for the business, while the cash balance of the business increases as well. Revenue account is an income and an increase in income is treated as increase in credit while the cash balance is an asset, and the increase of the asset is treated as a debit.

if you look at options A, B and D, all of these transactions are either mixed up or have both credits or debits which is wrong, because of this, only the answer C is correct.

5 0
3 years ago
On January 1, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 20
Step2247 [10]

Answer and Explanation:

The Journal entries are shown below:-

1. Right of use assets Dr, $371,049

          To Lease payable $371,049

(Being lease is recorded)

Working note:-

Present value of periodic lease payment $354,595

($100,000 × (present value of ordinary annuity of $1, n = 4, i = 5%)

($100,000 × 3.54595)

Present value of an estimated cash payment under a residual value

$16,454 (Present value $1, n = 4, i = 5%)

Lease payment = $354,595 + $16,454

= $371,049

2. Amortization expense Dr, ($371,049 ÷ 4 years) $97,262

             To Right of use assets $97,262

(Being related to the lease is recorded)

3. Interest expense Dr, (5% × $371,049) $18,552

Lease payable Dr, $81,448

            To annual payment of cash $100,000

(Being annual payment of lease is recorded)

3 0
3 years ago
tarbucks entered a partnership with Keurig Green Mountain to sell K-Cup single-serving coffee packs. Because Starbucks _________
kherson [118]

Answer:

E)

Explanation:

It was prepared for this because Starbucks tracked, as part of its ongoing environmental scanning activities, the percentage of households with single-cup brewers. The data that they managed to gather through this study allowed them to quickly determine that there was a large percentage of households with single-cup brewers and therefore the customer base was there. Having a large customer base would drastically increase their chances of obtaining massive profits by simply providing the necessary product to those households, which they plan to do with this partnership.

7 0
2 years ago
The production possibilities model shows an inverse relationship between the amount of one thing that can be produced and the am
Ivahew [28]

Answer:

Explanation:

The production possibility curve is a graphical illustration and tool used for economic analysis. It shows the various combination of goods that can be produced given available resources.

The PPC looks like a bow shape and has an inverse relationship, this is because this is because to produce 1 more of product A you need tp be willing to let go of 1 unit of product B(assuming we can only manufacture 2 products) this concept is known aa Marginal Rate of Transformation.

8 0
3 years ago
Read 2 more answers
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