X Company prepares monthly financial statements. The following transactions occurred on October 1: paid the premium for the first year of a $6,000, five-year insurance policy, paid cash for equipment that cost $20,000; the equipment has a life of four years and salvage value at that time of $2,000, and borrowed $24,000 from a bank, to be repaid on December 31 along with interest of $100 per month. The accountant made entries to record the transactions on October 1 and the adjustments on October 31. What was the combined effect of the October 1 and October 31 entries on October Net Income?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%
Give me answer within 45 min please I will give you upvotes its very urgent .....thanku....
X Company prepares monthly financial
statements. The following transactions occurred
on October 1:
paid the premium for the first year of a $6,000,
five-year insurance policy,
paid cash for equipment that cost $20,000; the
equipment has a life of four years and salvage
value at that time of $2,000, and
borrowed $24,000 from a bank, to be repaid on
December 31 along with interest of $100 per
month.
The accountant made entries to record the
transactions on October 1 and the adjustments
on October 31.
What was the combined effect of the October 1
and October 31 entries on October Net Income?
Transcribed Image Text:X Company prepares monthly financial statements. The following transactions occurred on October 1: paid the premium for the first year of a $6,000, five-year insurance policy, paid cash for equipment that cost $20,000; the equipment has a life of four years and salvage value at that time of $2,000, and borrowed $24,000 from a bank, to be repaid on December 31 along with interest of $100 per month. The accountant made entries to record the transactions on October 1 and the adjustments on October 31. What was the combined effect of the October 1 and October 31 entries on October Net Income?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Financial Planning
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education