On August 1, 2018, Avonette, Inc., sold equipment and accepted a six-month, 9%, $50,000 notereceivable. Avonette’s year-end is December 31.Q5-48. How much interest revenue should Avonette accrue on December 31, 2018?a. $4,500b. $2,425c. $1,875d. $2,250

On August 1, 2018, Avonette, Inc., sold equipment and accepted a six-month, 9%, $50,000 notereceivable. Avonette’s year-end is December 31.Q5-48. How much interest revenue should Avonette accrue on December 31, 2018?a. $4,500b. $2,425c. $1,875d. $2,250

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: 2018 Apr. 1 Oct. 1 Dec. 1 Dec. 31 2019 May 30 Loaned $8,000 to Bland, Co. Received a six-month, 10%…

A: Journal entries in accounting are a fundamental part of the double-entry bookkeeping system. They…

Q: . At December 31, Black should record interest revenue of

A: Given information is: Value of note = $18600 Interest rate = 8% Issue date = October 1

Q: Clarity Co. has a year-end of December 31. The company estimates its annual warranty expense to be…

A: A warranty is a promise to the customer that the company would provide free service for the product…

Q: On January 1, 2024, a business borrowed $12,000 on a five-year, 8% note payable. At December 31,…

A: INTEREST PAYABLE Interest on Note is Computed on Simple Interest Basis. Interest on Notes Payable is…

Q: the amount of interest expense

A: The note payable is a liability account which is a written promissory note.It is usually considered…

Q: al Mountain Industries borrows $23200 at 9% annual interest for six months on October 1, 2025. Which…

A: Accrued Interest Means Interest Generated On An Outstanding Debt During a Loan Period But Not The…

Q: On 31 May, 2020, the business borrowed $30,000 on a four year, 5% per annum loan that calls for…

A: Adjusting entries are prepared by management to ensure the accrual basis accounting system. It is…

Q: Green Lee lends Blue Who $200,000 on October 1st 2016, accepting a 9-month, 8% interest note. All…

A: Total Interest = $200,000 x 8% x 9/12 = $12,000 Interest accrued till Dec 31, 2016 = $12,000 x 3/9…

Q: On March 1, Smith Company purchased equipment costing $14,792 by signing a 3-year, 6% note requiring…

A: When we made a payment against a note Payable as liability decreases notes Payable account will be…

Q: On Dec. 8, Sheffield Company discounted at Sunshine Bank a $7,200 (maturity value), 122-day note…

A: Discount rate9%Maturity value $ 7,200.00Noted Period122days

Q: Mutiple choice: A hospitality company is the maker of an $18,000 note to be paid in quarterly…

A: Long term liabilities are liabilities which are expected to be paid off in the longer duration,…

Q: Reality Corporation borrowed $175,000 on April 1. The note requires interest at 12% and principal to…

A: Interest that should be recognised is interest expense for the period.That is interest accrued for…

Q: On October 1, Black Company receives a 4% interest-bearing note from Reese Company to settle a…

Q: A company needs to record six months of accrued interest on a four-year, 12%, $12,000 promissory…

A: Interest expense accrued = Promissory note payable x rate of interest x months/12

Q: n January 1, 2018 ABC Corporation issued a five-year $1,000,000, 8%, at $1,250,000. Interest is…

A: Effective Annual Interest Rate- Effective Annual Interest Rate is also known as effective interest…

Q: A company grants a payment extension to its customer by converting that $15,000 accounts payable to…

A: Interest on 45 days note for 30 days 115000*12%*30/360=$150

Q: On July 1, 2020, Oriole Ltd. borrowed $20,000 by signing a two-year, 4% note payable. The note is…

A: The interest expense is the amount of interest due for payment during the period. The installment…

Q: Subject : Accounting On January 1, Boston Company completed the following transactions (use a 7%…

A: PV is the way of calculating the present value of cash flows arising in the future present value of…

Q: On July 8, Jones Inc. issued an $84,700, 11%, 120-day note payable to Miller Company. Assume that…

A: Annual Interest=Issue amount×Interest rate=$84,700×11%=$9,317

Q: Wall Company sold a product under a two year warranty. The estimated cost of warranty repairs is 2%…

A: A warranty expense is concerned with repair or replacement claims by the user for defects in the…

Q: 5. On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assame tht t…

Q: Mackenzie Corp. is preparing the December 31, 2023, year-end financial statements. Following are…

A: Adjusting Entries :— It is the journal entry made at the end of the accounting period to adjust the…

Q: On January 1, 2021, CPS Co. borrowed $340,000 cash from iLend and issued a five-year $340,000, 4%…

A: Interest Expense: The cost of debt which is incurred during a particular accounting period is called…

Q: Far East Imports Inc. owes $64 000.00 to be repaid by monthly payments of $2475.00. Interest is…

A: Amount of loan = $64,000Monthly payments = $2,475Interest rate = 6.12%

Q: Required: 1. Prepare any required adjusting entries at December 31, 2023, for each of the above.…

A: Accounting entries known as "adjusting entries" are made to update account balances and guarantee…

Q: ABC Company borrows $497,000 from the bank at 7% for a three year period on Jan. 01. The loan will…

A: As per IFRS 9 Financial instruments, Borrowing from bank will be considered as Financial liability…

Q: Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of…

A: Introduction: An income statement is a critical financial record for every company. It illustrates…

Q: Brooks Inc. issued a $220,000, six-month, 6% note to purchase equipment on August 1, 2022. Brooks…

A: Journal Entry is the primary step to record the transaction in the books of accounts. The increase…

Q: On October 1, 2019, Muscat Company borrowed OMR 8,000 cash by signing a note payable due in one year…

A: We have the following information: Borrowed OMR 8,000 on October 1, 2019 Note payable is signed…

Q: [The following information applies to the questions displayed below.] Agrico Incorporated accepted a…

A: A journal entry is a basic accounting record that is used to collect and document a company's or…

Q: Midshipmen Company borrows $18,000 from Falcon Company on July 1, 2024. Midshipmen repays the amount…

A: The notes are used to borrow money, it is a type of agreement where the borrower makes a promise to…

Q: Smith Electic (SE) owed Estimated Warranty Payable of $1,100 at the end of 2023. During 2024, SE…

A: Warranty expense :— It is calculated by multiplying sales with warranty cost as a percentage of…

Question

On August 1, 2018, Avonette, Inc., sold equipment and accepted a six-month, 9%, $50,000 note
receivable. Avonette’s year-end is December 31.
Q5-48. How much interest revenue should Avonette accrue on December 31, 2018?
a. $4,500
b. $2,425
c. $1,875
d. $2,250

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On July 8, Jones Inc. issued an $69,300, 6%, 120-day note payable to Miller Company. Assume that the fiscal year of Jones ends July 31. Using a 360-day year, what is the amount of interest expense recognized by Jones in the current fiscal year? When required, round your answer to the nearest dollar. )a. $798 b. $266 Oc. $4,158 Od. $532
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 $765
Help!
A company purchased new equipment for $31,000 with a two-year installment note requiring 5% interest. The required monthly payment is $1,360. For the first month’s payment, what is the amount to record for interest expense? a. $120.b. $129.c. $68.d. $155.
E4-29 Mattson Loan Company completed these transactions: 2019 Apr. Dec. 2020 Apr. 1 Loaned $20,000 to Charlene Baker on a one-year, 5% note. 31 Accrued interest revenue on the Baker note. 1 Collected the maturity value of the note from Baker (principal plus interest). Show what Mattson would report for these transactions on its 2019 and 2020 balance sheets and income statements. Mattson's accounting year ends on December 31.
On July 8, Jones Inc. issued an $67,200, 9%, 120-day note payable to Miller Company. Assume that the fiscal year of Jones ends July 31. Using a 360-day year, what is the amount of interest expense recognized by Jones in the current fiscal year? When required, round your answer to the nearest dollar. a. $6,048 b. $1,158 c. $386 d. $772
On November 1, 2021, a firm issues a $10,000 6% 6-month note payable. Interest is paid with the maturity of the note. The firm performs adjusting entries each month. On April 30, when the note is repaid, the entry recorded: Decreases assets by $10,000 None are true Decreases both assets and liabilities $10,300 Includes an expense of $200 Includes an expense of $300
Rosewood Company made a loan of $7,000 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? Multiple Choice O O $420 in Year 1 and $0 in Year 2 $0 in Year 1 and $420 in Year 2 $105 in Year 1 and $315 in Year 2 $315 in Year 1 and $105 in Year 2
On September 1, Year 1, West Company borrowed $30,000 from Valley Bank. West agreed to pay interest annually at the rate of 5% 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 $500 $375 $-0- $150
Rosewood Company made a loan of $12,200 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? Multiple Choice $0 in Year 1 and $732 in Year 2 $732 in Year 1 and $0 in Year 2 $183 in Year 1 and $549 in Year 2 $549 in Year 1 and $183 in Year 2