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Anna71 [15]
4 years ago
11

On December 31, Leann Corp. paid $5,120 on an installment note that requires annual payments. The outstanding loan balance on Ja

nuary 1 was $50,000; the effective interest rate is 8%. The journal entry to recognize the payment should include debits to
Business
1 answer:
OleMash [197]4 years ago
3 0

Answer:

Dr Interest expense  $4,000

Dr Notes payable      $1,120

Explanation:

The $5,120 repaid comprised of both interest and principal repayments,hence there is need for the amount to be split into the two appropriate accounts.

The interest payable on the loan on yearly basis ,based on the outstanding loan balance of $50,000 is $4,000(8%*$50,000),hence the balance of $1,120($5,120-$4,000) represents the actual repayment of principal,as a result the notes payable account should be debited with $1,120.

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4 0
3 years ago
Read 2 more answers
The management option that can provide on-site infrastructure access when the network is down or complete remote access in cases
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Answer:

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