Mutual Inc, a 10 million dollar company, bought a domain subscription for $70 using a credit card. The subscription is from 01/01/2021 to 12/31/21. #1 Record the subscription purchase. #2 Determine if the domain needs to be amortized over a 12 months period. If so, perform the amortization.
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Mutual Inc, a 10 million dollar company, bought a domain subscription for $70 using a credit card. The subscription is from 01/01/2021 to 12/31/21. #1 Record the subscription purchase. #2 Determine if the domain needs to be amortized over a 12 months period. If so, perform the amortization.
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- 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.)Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
- For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.At the beginning of Year 1, Cactus Company has three employees: A, B, and C. Employee A has 3 expected years of future service. Employee B has 4 expected years of future service, and Employee C has 5 expected years of future service. Using the year-of-future-service method, compute the amortization fraction for Years 1 through 5 that Cactus would use to amortize its prior service cost.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.Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.On October 1, 2021, Grey Corp. purchased land by signing a six-month, 4% note for $225,000. The note, plus interest, will be repaid at the end of the six months. The December 31, 2021 adjusting entry required in connection with this note is: Question 4 options: DR Interest expense 750; CR Interest payable 750 DR Interest expense 4,500; CR Interest payable 4,500 DR Interest expense 9,000; CR Interest payable 9,000 DR Interest expense 2,250; CR Interest payable 2,250On August 1, 2018, Banco Company purchased a new machine on a deferred payment basis. A down payment of P 100 000 was made and 4 monthly installments of P 250 000 each are to be made beginning on September 1, 2018. The cash equivalent price of the machine was P 950 000. The entity incurred and paid installation costs amounting to P 30 000. What is the amount to be capitalized as cost of the machine?
