Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $640,000. The terms of the loan are 3.1% annual interest rate and payable in 8 months. Interest is due in equal payments each month. A. Compute the interest expense due each month. If required, round final answer to two decimal places. 1,653.33 B. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. If required, round final answers to two decimal places. If an amount box does not require an entry, leave it blank. Oct. 20 Interest Expense 1,653.33 Cash May 20 Cash 1,653.33 640,000 1,653.33 641,653.33
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $640,000. The terms of the loan are 3.1% annual interest rate and payable in 8 months. Interest is due in equal payments each month. A. Compute the interest expense due each month. If required, round final answer to two decimal places. 1,653.33 B. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. If required, round final answers to two decimal places. If an amount box does not require an entry, leave it blank. Oct. 20 Interest Expense 1,653.33 Cash May 20 Cash 1,653.33 640,000 1,653.33 641,653.33
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $640,000. The terms of the
loan are 3.1% annual interest rate and payable in 8 months. Interest is due in equal payments each month.
A. Compute the interest expense due each month. If required, round final answer to two decimal places.
1,653.33
B. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest
payment on May 20. If required, round final answers to two decimal places. If an amount box does not require an entry, leave it blank.
1,653.33
Oct. 20 Interest Expense
Cash
May 20
Cash
1,653.33
640,000
1,653.33
641,653.33
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education