What is the effect of the following business activity on the element indicated?A business with a 10% 6 month loan of $25,000, taken out Oct. 1, makes a month-end entry for interest.Revenue1) no effect2) decrease3) increase---4) increase to one and decrease to another

Interest expense is shown under expense side of P&L. It won't have impact on Revenue. However…

Answered: A business with a 10% 6 month loan of…

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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Annual interest of 3.5 percent paid if balance exceeds $800, $6 monthly fee if account falls below minimum balance, average monthly balance $880, account falls below $800 during 6 months. Round the answer to the nearest cent.
A $34,000 new car loan is taken out with the terms 9% APR for 48 months. How much are monthly payments on this loan? OA. $846.09 OB. $930.70 OC. $1,015.31 OD. $1,099.92
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and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts Cash payments $ 517,000 409,500 480,000 $ 459,400 351,900 524,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Answer is complete but not entirely correct. KAYAK COMPANY Beginning cash balance Add: Cash receipts Cash Budget January February March SA 40,000 $ 40,000 $ 74,168 517,000 409,500 480,000 557,000 449,500…
A company borrows $60,000 by signing a $60,000, 8% 6-year note that requires equal payments of $!2,979 at the end of each year. The first payment will record an interest expense of $4,800 and will reduce principal by $__________.
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Gen-X Ads Co. produces advertising videos. During the current fiscal year, Gen-X Ads Co. received the following notes: Date Face Amount Interest Rate Term 1. Apr. 10 $75,000 4% 60 days 2. June 24 13,200 6 30 days 3. July 1 36,000 6 120 days 4. Oct. 31 36,000 9 60 days 5. Nov. 15 72,000 6 60 days 6. Dec. 27 126,000 4 30 days Required: Assume 360 days in a year. 1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Note (a)Due Date (b)Interest Due at Maturity (1) (2) (3) (4) (5) (6) 2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank or enter "0". Cash Cash Notes Receivable Notes Receivable Interest Receivable Interest Receivable Feedback Count the number of…

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A business with a 10% 6 month loan of $25,000, taken out Oct. 1, makes a month end entry for interest. Revenue 1) no effect 2) decrease 3) increase --- 4) increase to one and decrease to another