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ryzh [129]
3 years ago
5

On January 1, 2021, Tropical Paradise borrows $50,000 by agreeing to a 6%, six-year note with the bank. The funds will be used t

o purchase a new BMW convertible for use in promoting resort properties to potential customers. Loan payments of $828.64 are due at the end of each month with the first installment due on January 31, 2021.
Required:

Record the issuance of the installment note payable and the first two monthly payments.
Business
1 answer:
mrs_skeptik [129]3 years ago
4 0

Answer:

January 1, 2021, vehicle purchased on credit

Dr Vehicles 50,000

    Cr Notes payable 50,000

January 31, 2021, first installment

Dr Notes payable 578.64

Dr Interest expense 250

    Cr Cash 828.64

Interest expense = $50,000 x 6% x 1/12 = $250

February 28, 2021, second installment

Dr Notes payable 579.89

Dr Interest expense 248.75

    Cr Cash 828.64

Interest expense = $49,750 x 6% x 1/12 = $248.75

Generally loans are made on a 360 day year basis, that means that the monthly interest expense is always calculated as 1/12 of the annual interest charge.

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Will the financial statements of a company always differ when different choices at the start of the accounting period are made r
german

Answer:

Will the financial statements of a company always differ when different choices at the start of the accounting period are made regarding the​ denominator-level capacity​ concept?

A. No. It depends on how a company handles the​ production-volume variance in the​ end-of-period financial statements. For​ example, if the adjusted​ allocation-rate approach is​ used, each​ denominator-level capacity concept will give the same financial statement numbers at​ year-end.

Explanation:

Level capacity strategy

The organisation manufactures or produces at a constant rate of output ignoring any changes or fluctuations in customer demand levels. This often means stockpiling or higher holdings of inventory when customer demand levels fall

4 0
3 years ago
On January 2, 2018, Baltimore Company purchased 14,000 shares of the stock of Towson Company at $13 per share. Baltimore obtaine
Norma-Jean [14]

Answer:

$315,600

Explanation:

Ownership = 40%

Investment = $182,000                

Share of dividends = 40%*21,000 =8400

Share of income = 40%*75000 = 30000

Increase in share price = $21-$13= $8

                                                                                 investment

                                                                   Dr                                        Cr

Investment                                     $182,000

Dividend received                                                                              $8400

Income received                              $30,000

Increase in share price                    $112,000

                                                         324,000                                      315,600

                                                   

5 0
3 years ago
During the year (not a leap year), Anna rented her vacation home for 87 days, used it personally for 13 days, and left it vacant
Oksana_A [137]

Answer:

<u>Anna can deduct up to US$ 10,000, so she can deduct as an itemized deduction the payment of US$ 2,500 on real estate taxes she made.</u>

Explanation:

Any taxpayer can deduct real estate taxes on the federal income tax return.  For 2019, the IRS says a taxpayer can deduct up to $10,000 ($5,000 if you're married filing separately) But limits apply and you have to itemize to take the deduction.

<u>Therefore, Anna can deduct up to US$ 10,000, so she can deduct as an itemized deduction, the payment of US$ 2,500 on real estate taxes she made.</u>

6 0
3 years ago
Tim Company had sales of $30,000, increase in accounts payable of $5,000, decrease in accounts receivable of $1,000, increase in
stepladder [879]

Answer:

$31,000

Explanation:

The computation of the cash collected from customers is shown below:

Cash collected from customers = Sales + Decrease in accounts receivable

                                                    = $30,000 + $1,000

                                                    = $31,000

We simply added the sales and the Decrease in accounts receivable so that the accurate amount can come

All other information which is given is not relevant. Hence, ignored it

7 0
3 years ago
On December 31, 2015, Waterway Industries is in financial difficulty and cannot pay a note due that day. It is a $2900000 note w
iris [78.8K]

Answer:

(a) $210,000

(b) $351,500

Explanation:

(a) Given that,

Fair value of equipment = $1,440,000

Face Amount of the note = $1,230,000

Gain on sale:

= Fair value of equipment - Face Amount of the note

= $1,440,000 - $1,230,000

= $210,000

(b) Given that,

Accrued Interest Payable = $290,000

Interest rate = 5%

Gain on the partial settlement and restructure of the debt:

= Accrued Interest Payable + (Face amount of note × Interest rate)

= $290,000 + ($1,230,000 × 5%)

= $290,000 + $61,500

= $351,500

4 0
3 years ago
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