Rainier Company borrowed $780,000 for five months. The annual interest rate on the loan was 11 percent. Rainiers fiscal year ends onDecember 31. Rainier borrowed the $780,000 one month prior to the start of its current fiscal year and paid back the $780,000 plusinterest four months into its current fiscal year.How much interest expense, if any, would Rainier report at the end of its last fiscal year and at the end of its current fiscal year?Last yearCurrent yearInterest Expense

Here, Rainier Company has borrowed $780000 for 5 months. It was borrowed one month prior to the…

Answered: Rainier Company borrowed $780,000 for…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

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Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
Rainier Company borrowed $630,000 for four months. The annual interest rate on the loan was 9 percent. Rainiers fiscal year ends on December 31. Rainier borrowed the $630,000 one month prior to the start of its current fiscal year and paid back the $630,000 plus interest three months into its current fiscal year. How much interest expense, if any, would Rainier report at the end of its last fiscal year and at the end of its current fiscal year? Last year interest expense= Current year interest expense=
c. Johnson's borrowed $300,000 at an 11 percent annual interest rate on April 1 of the current year to expand its boat storage facility. The loan requires Johnson's to pay the interest quarterly until the note is repaid in three years. Johnson's paid quarterly interest on July 1 and October 1.
General accounting
Campus Flights takes out a bank loan in the amount of $432,587 on March 1. The terms of the loan include a repayment of principal in 12 equal installments, paid annually from March 1. The annual interest rate on the loan is 10%, recognized at the end of the 12 equal installments. Compute the interest recognized in year 1 rounded to the whole dollar.
Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.) Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar. Compute the principal due in year 1. Loan= $200.500 Interest=8% Period=10 1) Interest Amount 200,500 x 8% x 10/12= 13,367 I WOULD LIKE TO KNOW HOW IT IS CALCULATED OR HOW THESE NUMBERS COME OUT, THANK YOU 2) r=8%, n=10 =6,71 (200,500/6.71)-(200,500x8%)= 13840 200,500-13,840=186,660 Dollar
On January 1, the Hudson Company borrowed $150,000 to purchase machinery and agreed to pay 4% interest for six years on an installment note. Each note payment is $28,614 and is due on the last day of the year. How much interest will Hudson report for the first year of the loan? (Do not round intermediate calculations. Only round your final answer to the nearest dollar.) O A. $6,000 OB. $28,614 C. $22,614 OD. $1,145
On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $107,000 face-value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,879 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $59,000 cash per year. b. Prepare an income statement and balance sheetfor each of the four years. Rent revenue is collected in cash at the end of each year. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.)
On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $52,000 cash per year. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the four years.
Glen Pool Club, Inc., has an installment loan outstanding with a current balance of $141,000. The company makes monthly installments of $1,450, which include interest computed at an annual rate of 6 percent. a. Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the loan’s unpaid balance. b. Prepare the journal entry to record the second monthly payment. c. Will monthly interest increase, decrease, or stay the same over the life of the loan?

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