Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the company’s general borrowings for the year:     £m 10% loan repayable 20X9 25  8% loan repayable 20Y2 75   Horizons plc began construction of a qualifying asset on 1 May 20X8 and withdrew funds of £4.5 million on that date to fund construction. On 1 September 20X8 an additional £6 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8. a. £850,000 b. £425,000 c. £305,625 d. £892,500 e. £541,875 f. £500,000

The bond indenture for the 10-year, 9% debenture bonds issued January 2, 20Y5, required working capital of $100,000, a current ratio of 1.5, and a quick ratio of 1.0 at the end of each calendar year until the bonds mature. At December 31, 20Y6, the three measures were computed as follows: 1. Current assets:       Cash $102,000           Temporary investments 48,000           Accounts and notes receivable (net) 120,000           Merchandise inventory 36,000           Prepaid expenses 24,000           Intangible assets 124,800           Property, plant, and equipment 55,200             Total current assets (net)   $510,000       Current liabilities:           Accounts and short-term notes payable $96,000           Accrued liabilities 204,000             Total current liabilities   300,000       Working capital   $210,000     2. Current ratio 1.7 $510,000 ÷ $300,000 3. Quick ratio 1.2 $115,200 ÷ $96,000 a.  Find the errors in the determination of the…

4. Compute the annual cost for interest and redemption of these bonds

Kitt Company borrows $800,000 from Neville Capital by issuing an 8-year (96-month), 12% note payable. Interest is due and payable each month based on the outstanding balance at the beginning of the month. Kitt assigns $850,000 of its accounts receivable as collateral for the lending arrangement. Prepare the journal entries to record the financing arrangement on Kitt’s books.