Answer and Explanation:
The journal entries are shown below:
On Jan 1
Cash $340,000
Bonds payable $340,00
(Being the bond payable is issued for cash)
For recording this we debited the cash as it increased the assets and credited the bond payable as it also increased the liabilities
On Dec 31
Interest expense ($340,000 × 8%) $27,200
To Cash $27,200
(Being the interest expense for year 1 is recorded)
For recording this we debited the interest expense as it increased the expenses and credited the cash as it decreased the assets
On Dec 31
Interest expense ($340,000 × 8%) $27,200
To Cash $27,200
(Being the interest expense for year 1 is recorded)
For recording this we debited the interest expense as it increased the expenses and credited the cash as it decreased the assets
<span>As the outsourcing decision is not in the audit term therefore the audit team is not needed to take it into consideration. Audit team is required to work for those matters which are in the term for which it is hired. Notes can be mentioned that outsourcing is used in the next term.</span>
Answer:
D. Capacity
Explanation:
In order to applying for a loan, the financial institution analyze the borrower information in terms of creditworthiness i.e. collateral property, cash on hand, repayment conditions, status of the job. These factors should be based on the capacity of the borrower whether he or she is eligible for a loan or not
Therefore according to the given situation, the option D is correct and the same is to be considered
Answer:
The correct answer is option (B).
Explanation:
According to the scenario, the given data are as follows:
For Jan.1,2020 value = $626,400
Interest rate = 7%
So, we can calculate the amount of bond interest expense by using following formula:
Interest Expense = Carrying Value × Market Interest Rate
By putting the value of following
Interest expense = $626,400 × 7%
= $626,400 × 0.07
= $43,838
Hence, the amount of bond interest expense to be recognized on December 31, 2020, is $43,838.
Answer:
$2,100
Explanation:
Particulars Fair market value Basis Differences
Inventory $60,000 $30,000 $30,000
Account receivables $40,000 $40,000 $0
Equipment $60,000 $80,000 <u> ($20,000)</u>
Taxable gain $10,000
Tax rate <u> 21% </u>
Built in gains tax <u>$2,100 </u>
So therefore, the built-in-gains tax that Clampett (Incorporated) will pay in 2021 is $2,100.
