Compute the interest accrued on each of the following notes receivable held by Kirkland, Inc., on December 31: (Round to the nearest dollar.) Maker Date ofNote Principal InterestRate Term Abel November 21 $42,000 12% 120 days Baker December 13 32,000 9% 90 days Charlie December 19 25,000 6% 60 days
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Compute the interest accrued on each of the following notes receivable held by Kirkland, Inc., on December 31: (Round to the nearest dollar.)
Maker |
Date of Note |
Principal |
Interest Rate |
Term |
|---|---|---|---|---|
| Abel | November 21 | $42,000 | 12% | 120 days |
| Baker | December 13 | 32,000 | 9% | 90 days |
| Charlie | December 19 | 25,000 | 6% | 60 days |
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