Answered: On July 1, 2018, Ross-Livermore…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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Question

On July 1, 2018, Ross-Livermore Industries issued nine-month notes in the amount of $400 million. Interest is
payable at maturity.
Required:
Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the
following independent assumptions:
Interest Rate Fiscal Year-End
1. 12% December 31
2. 10% September 30
3. 9% October 31
4. 6% January 31
The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends
on December 31

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