Answer:
The firm will pay 480 dollars each year as interest payment.
Explanation:
The interest amount is calculated by multiplying the rate of interest with the amount borrowed. In problem loan is 8,000 dollars and rate of interest is 6%, so the interest amount will be calculated as follow
Interest payment = 8,000 * 6% = 480 dollars
Answer:
b. understate the predetermined overhead rate
Explanation:
The rate is determinate by distributing the expected cost over the cost driver
In this case labor cost.
as this value is higher than it should
(labor + some indirect)
the result of the division will be lower thus, the overhead rate is lower than it should be without the mistake.
Answer:
a.
January 1, 2022
Cash $1100000 Dr
Bonds Payable $1100000 Cr
b.
December 31, 2022
Interest expense $66000 Dr
Interest Payable $66000 Cr
c.
January 1, 2023
Interest Payable $66000 Dr
Cash $66000 Cr
Explanation:
a.
The bonds are issued at face value. The face value of each bond is $1000 and there are 1100 bonds issued in total. Thus, the cash received from issuance of bonds is,
Cash = 1100 * 1000 = $1100000
So, we debit the cash by this amount and credit the bonds payable account.
b.
The interest expense for the year on these bonds is,
1100000 * 0.06 = $66000
The adjusting entry made on December 31 2022 will include a debit to the interest expense and a credit to the interest payable. The interest expense will be debited because under the accrual principle, we match the expenses to the period to which they relate.
c.
The entry to record payment of interest will result in a debit to interest payable as liability is being closed through this payment and a credit to cash
The answer is no sorry but i had to write more letters i hope this helps you