Amit and Bramit started business on 1st April, 2020 with capitals of 15,00,000 and 9,00,000 respectively. On 1st October, 2020, they decided that their capitals should be 12,00,000 each. The necessary adjustments in capitals were made by introducing or withdrawing by cheque. Interest on capital is allowed 8% p.a. Compute interest on capital for the year ended 31st March, 2021 (

Amit and Bramit started business on 1st April, 2020 with capitals of 15,00,000 and 9,00,000 respectively. On 1st October, 2020, they decided that their capitals should be 12,00,000 each. The necessary adjustments in capitals were made by introducing or withdrawing by cheque. Interest on capital is allowed 8% p.a. Compute interest on capital for the year ended 31st March, 2021 (

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Express Jet borrows $100 million on October 1, 2021, for one year at 6% interest. For what amount does Express Jet report interest expense for the year ended December 31, 2022?a. $0. b. $4.5 million. c. $1.5 million. d. $6 million.
Anw. PLs number 7! Thanks
On December 31, 2020, Olaer Company received two P5,000,000 notes receivable from customers in exchanged for consulting services rendered. On both notes, interest is calculated on the outstanding principal balance at the annual rate of 4% and payable at maturity. The note from Nazareno Corporation, made under customary trade terms, is due on October 1, 2021 and the note from Mudag Corporation is due on December 31, 2025. The market interest rate for similar notes on December 31, 2020 was 10%. The compound interest factors to convert future value into present value at 10% follow: present value of 1 due in nine months, 0.93, and present value of 1 due in five years, 0.62. 10. At what amounts should these two notes receivable be reported in Nazareno's December 31, 2020 statement of financial position? 11. At what amounts should these two notes receivable be reported in Mudag's December 31, 2020 statement of financial position?
PROBLEM: EB Bank granted a loan to a borrower on January 1, 2019. The interest on the loan is 10% payable annually starting December 31, 2019. The loan matures in three years on December 31, 2021. The principal amount of loan is P3,500,000. In addition, direct origination cost incurred amounted to P70,000, and indirect origination cost incurred, P35,000. Finally, origination fee charged against the borrower amounted to P238,000. a) Compute for the carrying amount of the loan receivable on January 1, 2019. b) The new effective rate after considering the origination fees and costs incurred is 12%. Prepare a table of amortization for the loan receivable. c) Prepare journal entries for 2019 and 2021.
On September 1, 2019, Tange company borrowed on a P5,400,000 note payable from a bank. The note bears interest at 12% and is payable in three equal annual principal payments of P1,800,000. On this date, the bank’s prime rate was 11%. The first annual payment for interest and principal was made on September 1, 2020. On December 31, 2020, what amount should be reported as accrued interest payable?
On June 30, 2020, the XYZ Corporation granted a two-year, non-interest bearing P2,000,000 advance to its treasurer. Prevailing interest rate is 12%. What is the carrying amount of the receivable from the treasurer on December 31, 2020? a. P2,000,000 b. P1,594,400 C. P1,690,064 d. P1,785,728
71. During 2019, Dew Company, a service organization, had P200,000 in cash sales and P3,000,000 in credit sales The accounts receivable balances were P400,000 and P485,000 on December 31,2018 ans 2019 respectively. If the entity desires to prepare a cash basis income statement, what amount should be reported as sales for the current year? а. 3,285,000 b. 3,200,000 с. 3,115,000 d. 2,915,000
On September 30, 2022 World Company borrowed P1, 000, 000 on a 9% note payable. The entity paid the first of four quarterly payments of P264, 200 when due on December 31, 2022. 1. What amount should be reported as interest expense for 2022? A. 90, 000 В. 22,500 C. 67,500 D. 30,000 2. On December 31, 2022, what is the carrying amount of the note payable? A. 758, 300 В. 750, 000 С. 825, 800 D. 735, 800
subject : Accounting
National Bank granted a loan to borrower on January 1, 2021. The interest on the loan is 10% payable annually starting December 31, 2021. The loan matures in thee years on December 21, 2023. Principal amount 4,000,000Origination fee charges against the borrower 342,100Direct Origination Cost incurred 150,000 What is the carrying amount of the loan receivable on January 1, 2021? a. 4,000,000b. 3,807,900c. 4,150,000d. 3,657,900
MNO Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Additional information is as follows: Principal amount of P5,000,000; Direct origination cost incurred for P100,000; Indirect origination cost incurred for P50,000 and Origination fee received from the borrower was P340,000. After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. Compute for the interest income for 2020.