⚫The company sells the toys with a 2 year warranty. The company estimates that warranty Expense will be 2% of Sales⚫Using straight line depreciation and an estimated useful life of 3 years to record depreciation expense for one month onthe equipment purchased. Compute the interest expense on the bank loan for the days in December. Use 365 days asthe number of days in the year. The corporation declares and pays a dividend of $400 to the shareholder. Complete theaccounting journal entry to each event

Part 2: Explanation:Step 1: Warranty Expense Calculation: Calculate the warranty expense based on…

Answered: ⚫The company sells the toys with a 2…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 7EA: Homeland Plus specializes in home goods and accessories. In order for the company to expand its...

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Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
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.)
Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. Assume the company makes timely principal payments of $5,000 each year at December 31 plus interest at 8%. Which of the following is true? a. After the first payment is made, the company owes $15,000 plus three years’ interest. b. After the first payment, $15,000 would be shown as a long-term liability. c. After the first payment is made, $5,000 would be shown as the current portion due on the long-term note. d. Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet.
← Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. Assume the company makes timely principal payments of $5,000 each year at December 31 plus interest at 8%. Which of the following is true? O A. Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet. OB. After the first payment is made, $5,000 would be shown as the current portion due on the long-term note. OC. After the first payment is made, the company owes $15,000 plus three years' interest. O D. After the first payment, $15,000 would be shown as a long-term liability.
Halep Inc. borrowed $58,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $15,978.42 at the end of each year. Prepare an amortization table showing the principal and interest in each payment. Round your answers to two decimal places. Year BeginningBalance Payment Interest To Principal EndingBalance 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 2 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 3 fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 4 fill in the blank 16
Help Sav Chancellor Limited sells an asset with a $3.0 million fair value to Sophie Incorporated. Sophie agrees to make six equal payments, each to be paid one year apart, commencing on the date of sale. Each payment Includes principal and 6% annual interest. What is the amount of each annual payment? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (EV of $1. PV of $1. EVA of $1.PVA of $1. EVAD of $1 and PVAD of $1) Multiple Choice $610,076 $622,185 $499,870 $575,555
Halep Inc. borrowed $36,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $9,917.64 at the end of each year. Prepare an amortization table showing the principal and interest in each payment. Round your answers to two decimal places. Year BeginningBalance Payment Interest To Principal EndingBalance 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 2 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 3 fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 4 fill in the blank 16 fill in the blank 17 fill in the blank 18 fill in the blank 19 fill in the blank 20
Halep Inc. borrowed $54,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $14,876.46 at the end of each year. Prepare an amortization table showing the principal and interest in each payment. Round your answers to two decimal places. Year BeginningBalance Payment Interest To Principal EndingBalance 1 $ $ $ $ $ 2 3 4
Halep Inc. borrowed $26,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $7,162.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment. Round your answers to two decimal places. Year BeginningBalance Payment Interest To Principal EndingBalance 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 2 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 3 fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 4 fill in the blank 16 fill in the blank 17 fill in the blank 18

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