On December 1, a company signed a $6,000, 90-day, 5% note payable, with principal plus interest due on March 1 of the following year. What amount of interest expense should be accrued at December 31 on the note? a. $300 c. $100 e. $0 b. $25 d. $75

On December 1, a company signed a $6,000, 90-day, 5% note payable, with principal plus interest due on March 1 of the following year. What amount of interest expense should be accrued at December 31 on the note? a. $300 c. $100 e. $0 b. $25 d. $75

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter6: Investing And Financing Activities

Section: Chapter Questions

Problem 4.4C

See similar textbooks

Related questions

Q: On July 8th, Jones Inc. issued a $75,600, 12%, $120 Day note payable to Miller company. Assume that…

A: From July 8th to July 31st = 23 days

Q: On November 1, Jasper Company loaned another company $270,000 at a 8.0% interest rate. The note…

A: Interest revenue reported in first year = Amount of loan x rate of interest x No. of months / 12

Q: On November 7, Mura Company borrows $150,000 cash by signing a 90-day, 10%, $150,000 note payable.…

A: Accrued interest is the term of accounting which states the interest amount that has been incurred…

Q: 1. On June 8, Williams Company issued an $70,894, 9%, 120-day note payable to Brown Industries.…

A: Interest = Value of Note * Interest Rate * No. of DaysInterest = $70,894 * 9% * 120/360Interest =…

Q: On October 1, 2010, the company deposits 12.000 TL in a bank account for 1 year at 10%. Which entry…

A: Accrued revenues are those revenues which are earned but not received in the business. These are…

Q: As promise for future payment, Carlock Systems received a six-month, 12% note for $50,000 from a…

A: Interest revenue = Notes receivables x rate of interest x months/12

Q: On June 1, Davis Inc. issued an $85,500, 10%, 120-day note payable to Garcia Company Assume that the…

A: Calculate the total interest as follows: Interest = Bonds amount * interest rate Interest = $85,500…

Q: Sheridan Company borrows $37,800 on July 1 from the bank by signing a $37,800, 8%, one-year note…

A: Sheridan Company has borrowed on July 1. Interest for 6 months is due as on 31st December. Interest…

Q: On October 1st, a company borrowed $60,000 from Eighth National Bank on a 1-year, 7% note. If the…

A: Adjusting entries are entries that are passed at the end of the period to accurately present income,…

Q: On June 1, Davis Inc. issued an $76,100, 12%, 120-day note payable to Garcia Company Assume that the…

A: No. of days for which interest to be recognized in the following year = Total days of notes - total…

Q: On October 1, Black Company receives a 8% interest-bearing note from Reese Company to settle a…

A: Lets understand the basics. For calculating interest revenue needs to record, we need to use below…

Q: On January 5, Daisy Co., which follows a calendar year accounting, issued $1,000,000 of notes…

A: Long term debt = Total notes payable - current portion = $1000000 - 250000 = $750,000

Q: A company received a Note Receivable from a customer for a sale. The 9 percent, 9-month note was…

A: Value of notes receivable $1,50,000 Rate of Interest 9% Period (May 31 to December 31) 7 months…

Q: At 30 June 20X2 a company had $1m 8% loan notes in issue, interest being paid half-yearly on 30…

A: We have the following information: At 30 June 20X2 a company had $1m 8% loan notes in issue,…

Q: ABC Company received a four-month note receivable in the amount of P74,000,000 on September 1. The…

A: Introduction: As per accrual concept any income or expenses shall be recognized only when they are…

Q: Justin Company signed a $90,000, three-month, 9% note payable, on December 1. If the accounting…

A: Interest accrued on December 31= Face value of bonds x rate of interest x no. of month/12 = $90000 x…

Q: A business borrowed $59,037 on March 1 of the current year by signing a 30 day, 11% interest bearing…

A: The entry to record the payment should include Debit to Interest Expenses for $541.

Q: on June 8th Alton Co issued in 62700 8% 120 Day note payable to seller Co. Assume that the fiscal…

A: Notes payable is a negotiable instrument issued by a promisor that includes a promise to pay a…

Q: On September 1, 2017, Brita Hawtof Company signed a $75,000, nine month, 6 percent note payable. The…

A: Prepare journal entry the interest accrued but not paid.

Q: At 30 June 20X2 a company had $1m 8% loan notes in issue, interest being paid half-yearly on 30…

A: We have the following information: At 30 June 20X2 a company had $1,000,000 8% loan notes in issue…

Q: On September 1, 2021, Allied Moving Corp. borrows $90,000 cash from First National Bank. Allied…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: On December 1, Victoria Company signed a 90-day, 4% note payable, with a face value of $12,600. What…

A: Given, Face value of the note = 12,600 Interest rate = 4%

Q: On November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $20,700. What…

A: The adjustment entries are prepared to adjust the revenue and expenses of the current period.

Q: On December 1, Martin Company signed a $5,000 3-month 6% note payable, with the principle plus…

A: Interest accrued at December 31 on the note = Face value of the note x rate of interest x no. of…

Q: On June 1, Davis Inc. issued an $68,700, 8%, 120-day note payable to Garcia Company Assume that the…

A: Solution We are provided with the following information Interest rate = 8% Amount of note payable =…

Q: A company grants a payment extension to its customer by converting that $15,000 accounts payable to…

A: Interest on 45 days note for 30 days 115000*12%*30/360=$150

Q: On August 1, a $60,000, 7%, 3-year installment note payable is issued by a company. The note…

A: Principal =$60,000 Interest =$60,000×7% =4200 Principal + interest paid in 31 July =…

Q: On October 1, 2010, the company deposits 12.000 TL in a bank account for 1 year at 10%. Which entry…

A: Interest Revenue = Deposit amount * Rate * Period

Q: On October 1, a company borrowed $200,000 on a two-year, 12% note, with interest and principal to be…

A: Given: Principal = $200,000 Interest rate = 12% From Oct 1 to Dec 31 = 3 months

Q: A company has a $15,000 loan payable that is due over five years. $3,000 of the loan must be paid in…

A: Current liabilities include all those liabilities which are payable within a time period of twelve…

Q: On July 1, 2020 Walker Inc. signed a $600,000, 15 month, 10% note payable. At due date, the…

A: This is based on bill of exchange, in the given case since note is payable in 15 months and the same…

Q: Determining current portion of long-term note payable On January 1, Irving Company purchased…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Slack Inc. borrowed $320,000 on April 1. The note requires interest at 12% and principal to be paid…

A: Accrual basis: Accrual basis is a method of accounting. In this method recording of revenues are…

Q: A business issued a 120-day, 6% note for $10,000 to a creditor on account. The company uses a…

A: Hey, Since there are multiple questions posted, we will answer first question. If you want any…

Q: On November 1, Jasper Company loaned another company $230,000 at a 12.0% interest rate. The note…

A: Solution: Adjusting entries are journal entries usually made at the end of an accounting period to…

Q: On June 1, Davis Inc. issued an $64,900, 7%, 120-day note payable to Garcia Company Assume that the…

A: Interest to be received is calculated by multiplying the principal with rate of interest and time .…

Q: On January 1, a company borrowed cash by issuing a $300,000, 5%, installment note to be paid in…

Q: On October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a…

A: The interest revenue is the interest earned for the period on the note receivable, etc.

Q: Al Reem Co. signed an $18,000 six-month note payable on September 1 that bears intérest at a rate of…

A: Interest accrued on Note at December 31 = Face value of note x rate of interest x no. of months/12

Q: 7. )River Ridge Music School borrowed $30,000 from the bank signing a 6%, 6-month note on November…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: On July 1, Alton Co. issued an $74,700, 10%, 120-day note payable to Seller Co. Assume that the…

A: Interest will be recognized on $74700 and the interest rate charged is 10%. Amount of interest…

Q: The following transactions are from Ohlm Company. (Use 360 days a year.) Year 1 December 16 Accepted…

A: 1. Interest Recognition - Interest is the income earned by the issuer of the notes on the account.…

Q: MFT Company borrowed P10,000 from the bank signing a 9%, 3-month note on September 1. Principal and…

A: Amount borrowed = $10,000 Interest rate = 9% Interest expense = 10,000 x 9% x 1/12 = 75

Q: On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What…

A: Interest accrued = Note payable x Interest rate x 30/360 = $15000 x 6% x 1/12 = $75

Question

On December 1, a company signed a $6,000, 90-day, 5%
note payable, with principal plus interest due on March 1 of
the following year. What amount of interest expense should
be accrued at December 31 on the note?
a. $300 c. $100 e. $0
b. $25 d. $75

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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

Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
A business issued a $5,000, 60-day, 12% note to the hank. The amount due at maturity is: A. $4,900 B. $5,000 C. $5,100 D. $5,600
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
Everglades Consultants takes out a loan in the amount of $375,000 on April 1. The terms of the loan include a repayment of principal in eight, equal installments, paid annually from the April 1 date. The annual interest rate on the loan is 5%, recognized on December 31. (Round answers to the nearest cent, if needed.) A. Compute the interest recognized as of December 31 in year 1. B. Compute the principal due in year 1.
Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?
A companys sales for January are $250,000. If the company projects warranty obligations to be 5% of sales, what is the warranty liability amount for January?
Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that it will owe 17,400 in property taxes for the year. On June 1, its property taxes are assessed at 17,000, which it pays immediately. Prepare the related journal entries for April 1, May 1, and June 1. Then compute the monthly property tax expense that Cee Co. would record during June through March.
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.
Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.) A. Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar. B. Compute the principal due in year 1.
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.
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
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.