The Yankel Corporation’s controller prepares adjusting entries only at the end of the fiscal year. The following adjusting entries were prepared on December 31, 2024: General Journal Debit Credit Interest expense 2,220   Interest payable   2,220 Insurance expense 74,000   Prepaid insurance   74,000 Interest receivable 4,440   Interest revenue   4,440 Additional information: The company borrowed $37,000 on June 30, 2024. Principal and interest are due on June 30, 2025. This note is the company’s only interest-bearing debt. Insurance for the year on the company’s office buildings is $111,000. The insurance is paid in advance. On August 31, 2024, Yankel lent money to a customer. The customer signed a note with principal and interest at 9% due in one year. Required: What is the interest rate on the company’s note payable? The 2024 insurance payment was made at the beginning of which month? How much did Yankel lend its customer on August 31?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Yankel Corporation’s controller prepares adjusting entries only at the end of the fiscal year. The following adjusting entries were prepared on December 31, 2024:

General Journal Debit Credit
Interest expense 2,220  
Interest payable   2,220
Insurance expense 74,000  
Prepaid insurance   74,000
Interest receivable 4,440  
Interest revenue   4,440

Additional information:

  1. The company borrowed $37,000 on June 30, 2024. Principal and interest are due on June 30, 2025. This note is the company’s only interest-bearing debt.
  2. Insurance for the year on the company’s office buildings is $111,000. The insurance is paid in advance.
  3. On August 31, 2024, Yankel lent money to a customer. The customer signed a note with principal and interest at 9% due in one year.

Required:

  1. What is the interest rate on the company’s note payable?
  2. The 2024 insurance payment was made at the beginning of which month?
  3. How much did Yankel lend its customer on August 31?
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