ABC Corporation borrows $60,000 on a note payable that charges annual interest of 6 percent. The company's Sept. 30 balance sheet shows Interest Payable of $2,100. How many months earlier did ABC borrow the money?
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A: Interest Expense = Amount borrowed X Rate of Interest X Number of days/ 360 days
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- Colson Company has a line of credit with Federal Bank, Colson can borrow up to $386,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 2.50 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.75 percent + 2.50 percent) annual interest on $81,000 for the month of January. Month January February March April Amount Borrowed or (Repaid). $ 81,000 117,900 (24,400) 27,600 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of Colson's liability at the end of each of the first…a. $6.205 13 Ob $4,978 38 Oc $4,148 44 Od $3,125 26 A new machine can be purchased for $50.000. It is expected useful life is 9 years, with a salvage value of $5,000. Annual revenues will be $22 000/year and annual expanses will be S8,000/year Over the 9 years study penod, If the MARR is 10%, based on AW analysis, the project is wered of 3 00 estion Select one: O a Not Acceptable and its AW-S2.345 b. Not ble and its AW =-$3 281 OC Acceptable and its AW $4257 Od Acceptable and its AW =$6178 Oe Acceptable and its AW =$5688 NEXT PAGE ANFO CONTACTUS GET SOCIAL 83 F Haze 中x)Somber Company borrows $892,000 from Silver Financing Associates by securing a revolving line of credit at a 9% interest rate on April 15. Interest is due and payable at the end of each month based on the outstanding balance at the beginning of the month. Somber assigns $939,000 of its accounts receivable as collateral for the lending arrangement. Assume that accounts receivable are collected at the end of the month and the proceeds are remitted to Silver at the end of the month. Month Accounts Receivable Collected April 140,000 May 490,000 June 117,000 Requirements a. Compute the balance of notes payable at the end of each month. b. Prepare the necessary journal entries for these transactions. c. If the accounts receivable had been pledged as collateral, what entry would be made at April 15? A: Notes Notes Payable Accounts Payable Beginning Interest Receivable Cash Paid Ending Month…
- On September 1, Year 1, West Company borrowed $34,000 from Valley Bank. West agreed to pay interest annually at the rate of 9% per year. The note issued by West carried an 18-month term. West Company has a calendar year-end. What is the amount of interest expense that will be reported on West's income statement for Year 1? Multiple Choice O O $-0- $1,020 $306 $765On January 1, a company borrowed $35,148 for 6 months at an interest rate of 8%. The principal and interest are due at the maturity date of the note. How much interest should be accrued at the end of January? Round your answer to the nearest whole dollar (i.e., no decimal places).On Sept 1, 20X1, Orange Co borrowed P240,000 from ABC Bank to fund a new business venture. Orange issued a 6-month 12% promissory note. Principal and interest is payable on maturity date . REQUIRED: Journal entries from Sept 1 until the note matures.
- At the start of the current year, a company issued a $1,000,000 note to a bank. The company must pay the bank $200,000 plus interest each January 1 for the next five years starting at the beginning of next year. The company will report the note payable on its current year's balance sheet as O Current liabilities, $500,000; Long-term Debt, $500,000,0 Current liabilities, $200,000; Long-term Debt, $800,000. O Current liabilities, $800,000; Long term Debt, $200,000. 4 O Current liabilities, $1,000,000. O Long-term debt, $1,000,000.P. nilOn January 1, year 8 Harper Company finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Company report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782 Multiple Choice $9,209 $11,583 $12,162 $15,000
- Franklin Company obtained a $110,000 line of credit from the State Bank on January 1, Year 1. The company agreed to accept a variable interest rate that was set at 2% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Borrowing is shown as a positive amount and repayments are shown as negative amounts indicated by parentheses. 1-January 1-February 1-Marchi Amount Borrowed Prime Rate for the Month 4.08 4.58 5.08 Based on this information alone, the amount of interest expense recognized in March would be closest to: (Do not round intermediate calculations. Round your answer to the nearest whole number.) Multiple Choice $177, $309. (Repaid) $ 32,000 (11,000) 32,000 $199.NYJ, Inc. borrowed $800,000 on July 1, 20X1, and signed a ten-month note bearing interest at 5%. Principal and interest are payable in full at maturity. In connection with this note, NYJ, Inc. should record interest expense in 20X2 in the amount of:11). rosewood company made a loan of $12,600 to one of the company's employees on april 1, year 1. the one-year note carried a 6% rate of interest. what is the amount of interest revenue that rosewood would report in year 1 and year 2 respectively?