On October 24, you plan to purchase a $1,800 computer by using one of your two credit cards. The Silver Card charges 18% interest and calculates interest based oi the balance on the first day of the previous month. The Gold Card charges 18% interest and calculates interest based on the average daily balance. Both cards have $0 balance as of October 1. The closing date is the end of the month for each card. Your plan is to make a $600 payment in November, make a $600 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest (in $) charged by each card for this purchase. Silver Card Gold Card 2$ (b) Which card is the better deal and by how much (in $)? The --Select--- v is the better deal by $

On October 24, you plan to purchase a $1,800 computer by using one of your two credit cards. The Silver Card charges 18% interest and calculates interest based oi the balance on the first day of the previous month. The Gold Card charges 18% interest and calculates interest based on the average daily balance. Both cards have $0 balance as of October 1. The closing date is the end of the month for each card. Your plan is to make a $600 payment in November, make a $600 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest (in $) charged by each card for this purchase. Silver Card Gold Card 2$ (b) Which card is the better deal and by how much (in $)? The --Select--- v is the better deal by $

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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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.
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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 October 23, you plan to purchase a $1,800 computer by using one of your two credit cards. The Silver Card charges 18% interest and calculates interest based on the balance on the first day of the previous month. The Gold Card charges 18% interest and calculates interest based on the average daily balance. Both cards have a $0 balance as of October 1. The closing date is the end of the month for each card. Your plan is to make a $600 payment in November, make a $600 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest (in $) charged by each card for this purchase. Silver Card$ Gold Card$ (b) Which card is the better deal and by how much (in $)? The ---Select--- Silver Card Gold Card is the better deal by $ .
On October 22, you plan to purchase a $1,800 computer by using one of your two credit cards. The Silver Card charges 18% interest and calculates interest based on the balance on the first day of the previous month. The Gold Card charges 18% interest and calculates interest based on the average daily balance. Both cards have a $0 balance as of October 1. The closing date is the end of the month for each card. Your plan is to make a $600 payment in November, make a $600 payment in December, and pay offthe remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest in $) charged by each card for this purchase. Silver Card $ Gold Card $ (b) Which card is the better deal and by how much in…
On October 24, you plan to purchase a $1,800 computer by using one of your two credit cards. The Silver Card charges 18% interest and calculates interest based on the balance on the first day of the previous month. The Gold Card charges 18% interest and calculates interest based on the average daily balance. Both cards have a $0 balance as of October 1. The closing date is the end of the month for each card. Your plan is to make a $600 payment in November, make a $600 payment in December, and pay off the remaining balance in January. All your payments will be received and posted on the 10th of each month. No other charges will be made on the account. (Round your answers to the nearest cent.) (a) Based on this information, calculate the interest (in $) charged by each card for this purchase. Silver Card $ Gold Card $