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emmasim [6.3K]
2 years ago
14

Famous Foods is a fast-food chain restaurant famous for its hot coffee (its coffee temperature is a bit higher than that of the

industry average). One sunny morning, Jane went to a Famous drive-through for breakfast and purchased coffee. Jane put the cup between her knees and tried to get the coffee lid off. As she tugged at the lid, scalding coffee spilled onto her. The 170-degree coffee burned her. She had to be hospitalized and was unable to work for two weeks to treat the third-degree burns she suffered. The total medical expenses she incurred were $4,000. Normally she could make $5,000 a week. Her estimated pain and suffering was $3,000. Jane sued Famous and asked for punitive damage of $50,000 in addition to compensatory damages. Question 23 of 250.4 Points What is the total amount of special damages that Jane would be entitled to
Business
1 answer:
Mekhanik [1.2K]2 years ago
5 0
The total amount of points are 917272829.
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Answer: Debit Interest Expense and credit Interest Payable, $1,800

Explanation:

The amount of time that has elapsed between the 1st of November and the 31st of December is 2 months.

This means that the interest over the last 2 months has to be calculated and recorded on the 31st of December.

Bear in mind that the 9% is an annual interest rate figure and so when calculating the interest, you must adjust for the amount of months in the year.

Interest owed for 2 months is,

= 9% * 2/12 (2 months have elapses out of 12 months in the year) * $120,000

= $1,800

Interest owed is $1,800.

The correct entry will therefore be,

Dec 31

DR Interest Expense $1,800

CR Interest Payable $1,800

( To record interest payable on note)

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