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Ierofanga [76]
3 years ago
10

West Company borrowed $10,000 on September 1, Year 1 from the Valley Bank. West agreed to pay interest annually at the rate of 6

% per year. The note issued by West carried an 18-month term. Based on this information the amount of interest expense appearing on West's Year 1 income statement would be:
a. $0.


b. $234


c. $585


d. $780
Business
1 answer:
Setler [38]3 years ago
8 0

Answer:

The correct answer is $200

Explanation:

The interest expense appearing on the company's income statement in year 1 is for  a period of four months(September to December) year 1.

The interest expense using an annual rate of 6% is computed thus:

interest expense=$10,000*6%*4/12=$200

The correct option is $200 which is not one of the options provided,hence the options need.

In another version of the question,option D was $200 which shows is missing here,

All in all, the correct answer is $200 interest for a period of four months from September to December

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The Shoe Exchange issues 3,000 shares of its $1 par value common stock to provide funds for further expansion. The issue price i
Nezavi [6.7K]

Answer:

Debit Cash account           $57,000

Credit Shares capital         $3,000

Credit Share premium       $54,000

Being entries to record cash received from the issuance of shares

Explanation:

Par value per share = $1

Issue price per share = $19

Premium per share from issue = $19 - $1

                                                   = $18

Number of issued shares = 3000

Share capital balance from issue = 3000 × $1

                                                          = $3000

Premium balance = 3000 × $18

                             = $54,000

Cash received from Issue = 3000 × $19

                                           = $57,000

Entries to be posted

Debit Cash account           $57,000

Credit Shares capital         $3,000

Credit Share premium       $54,000

Being entries to record cash received from the issuance of shares.

4 0
3 years ago
Mary expects the inflation rate to be 5 percent, and she is willing to pay a real interest rate of 3 percent. Joe expects the in
OleMash [197]

Answer:

55

Explanation:

correct

8 0
3 years ago
List four common sources of funding for a small business.
Lunna [17]

Businesses can have many different types of funding, some are bank loans, from crowdfunding (fundraising), families and relatives, or from stocks (investing and selling). Some of the more complex types of funding include having angel investors and venture capitalists.

3 0
3 years ago
Credits are used to record:___________
muminat

Answer:

The correct answer is letter "B": decreases to assets and expenses and increases to liabilities, revenues, and stockholders' equity.

Explanation:

When it comes to accounting book-keeping, a credit is an entry that increases <em>liabilities </em>(amounts owed to third parties) and <em>equities </em>(assets minus liabilities) in their corresponding accounts or decreases <em>assets </em>(resources owned by the company) and <em>expenses </em>(costs of the business operations) accounts.

4 0
3 years ago
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ivanzaharov [21]

<u>Explanation:</u>

I would recommend Jamie Lee to use consolidating of her debt such as the credit card bills and taking personal loans only when she has a regular income and creditworthiness. She should also be able to payback her debts quickly and on time. If the interest rates offered by the company are lower for consolidated debt then she can choose this method to reduce her interest payments.

The debt management companies do not pay off her loans but they manage the funds through escrow account. On non payment it will result in diminishing personal credit score. Debt consolidation can be kept as the last resort when she is out of options to pay her debts.

7 0
3 years ago
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