Pink Stamp Chop Trading provided the following interest expense account.2020(a)ww*************Jan 1Aug 4Oct 9Dec 31Interest payableCash at bankPrepaid interest*************Income summaryInterest expense accountDr $745Cr $300120325Bal $300 Cr445 Dr325 DrThe business hopes to increase its cash balance for expansion but does not wish to incuradditional interest expense on long-term borrowings. It is considering other options ofincreasing its cash balance without borrowing from the bank.REQUIREDInterpret the entries on the following dates.(i) 1 January(ii) 4 August(iii) 9 October(b) Suggest and explain four ways in which a business can increase its cash balanceaside from securing long-term borrowings.

Lets understand the basics. Journal entry is required to make in order to record event and…

2020 Jan 1 Interest payable Aug 4 Cash at bank Oct 9 Prepaid interest Dec 31 Income summary Interest expense account Dr $ 745 Cr $ 300 120 325 Bal S 300 445 325 The business hopes to increase its cash balance for expansion but does not wish dditional interest expense on long-term borrowings. It is considering other options ncreasing its cash balance without borrowing from the bank.

2020 Jan 1 Interest payable Aug 4 Cash at bank Oct 9 Prepaid interest Dec 31 Income summary Interest expense account Dr $ 745 Cr $ 300 120 325 Bal S 300 445 325 The business hopes to increase its cash balance for expansion but does not wish dditional interest expense on long-term borrowings. It is considering other options ncreasing its cash balance without borrowing from the bank.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PA9. LO 8.6 Domingo Company received the following bank statement. Using Problem PA3, prepare the bank reconciliation.
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CHAPTER : BANK RECONCILIATION
Consider a bank with the following balance sheet: Assets Required reserves $10 Excess reserves $27 Loans $70 Required reserves Excess reserves Loans million million million $ $ $ Assume that required reserves are 8%. In order to avoid insolvency, regulators decide to provide the bank with $27 million in bank capital. Assume that bad news about mortgages is featured in the local newspaper, causing a bank run. As a result, $40 million in deposits is withdrawn. Show the effects of the capital injection and bank run on the balance sheet. (Round your responses to the nearest whole number.) Assets Liabilities Checkable deposits Bank capital million million million Liabilities $120 million - $13 million Checkable deposits Bank capital $ $ million million
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