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Montano1993 [528]
3 years ago
12

On September 1, Kennedy Company loaned $100,000, at 12% annual interest, to a customer. Interest and principal will be collected

when the loan matures one year from the issue date. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end?
a. Debit Interest Expense, $12,000; credit Interest Payable, $12,000
b. Debit Interest Expense, $4,000; credit Interest Payable, $4,000
c. Debit Interest Receivable, $4,000; credit Interest Revenue, $4,000.
d. Debit Interest Receivable, $12,000; credit Cash, $12,000
e. Debit Cash, $4,000; credit Interest Revenue, $4,000.
Business
1 answer:
GenaCL600 [577]3 years ago
6 0

Answer:c. Debit Interest Receivable, $4,000; credit Interest Revenue, $4,000.

Explanation:

The interest payable = Principal x Rate x Time (period)

= $100,000 x 12% x 4/12 ( September to December)

$100,000 x 0.12 x 1/3

$100,000 x 0.04

=$4000

Journal entry to record accrued interest at Year end for loan issued on sept 1st.

Date         Account titles                   Debit         Credit

Dec 31st     Interest Receivable        $4000

                  Interest   Revenue                                $4000

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The physical property that may be able to provide a beneficiary for metal pots as a source of good cooking is its heat conductivity of which allow this material to be conducted to heat and allows the food to be cooked thoroughly making it good for cooking.

5 0
2 years ago
Exercise 19-08 a-b Oriole Corporation incurred the following costs while manufacturing its product.
telo118 [61]

Answer:

$371,700

Explanation:

The computation of the cost of goods sold is shown below:

Cost of goods manufactured  = Direct materials used + Direct labor cost + Manufacturing overhead cost + beginning work in process inventory - ending work in process inventory

where,

Manufacturing overhead cost is

= Depreciation on plant + Factory supplies used + Property tax on plant

= $61,000 + $29,300 + $21,800

= $112,100

The cost of goods manufactured is

= $126,400 + $113,500 + $112,100 + $14,600 - $16,700

= $349,900

Now the cost of goods sold is

= Beginning finished goods + Cost of goods manufactured - ending finished goods

= $70,900 + $349,900 - $49,100

= $371,700

6 0
3 years ago
Catamount Company had current and accumulated E&P of $500,000 at December 31, 20X3. On December 31, the company made a distr
lapo4ka [179]

Answer:

D. No loss recognized and a reduction in E&P of $200,000

Explanation:

Given that:

  • Current and accumulated E&P : $500,000
  • A distribution of land to its sole shareholder: $200,000
  • E&P basis to Catamount :  $250,000

From that, we can see that the current and accumulated E&P is greater than its distribution of land so no loss would be reported so there will be reduction in earning and profits of the company of $200,000.

Hope it will find you well.

5 0
2 years ago
What is the prime rate? a. the prime rate is the best interest rate that banks offer their most creditworthy customers. b. the p
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Prime rate is (a) the best interest rate that banks offer their most creditworthy customers.

A prime rate is decided by the bank to lend money to its customers where the credit giving is decided on the basis of the credit history and points on the customers formally known as the credit rate of investment.

It totally depends upon the allowance of credit by financial institutions and then the payment made by the loan taking customers within a stipulated time frame.

To learn more about prime rate here,

brainly.com/question/28235888

#SPJ1

3 0
1 year ago
A merchandiser:A merchandiser:
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Answer:

A.Earns net income by buying and selling merchandise.

Explanation:

Merchandiser is a organization or individual which supplies and promotes products to the consumers. Merchandisers buy the merchandise from manufacturer and display it on their place to sale it. The Net value of Purchase price and Selling price is their return. So, They earn the net income from buying and selling of product.

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3 years ago
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