Your company was charged $44.19 interest on an overdue amount of $6,275 that was 20 days overdue. What simple rate of interest does this represent? Express your answer as an annual percentage rate rounded to two decimal places. Do not include symbols in your answer (i.e. % sign). Your Answer: Answer

Your company was charged $44.19 interest on an overdue amount of $6,275 that was 20 days overdue. What simple rate of interest does this represent? Express your answer as an annual percentage rate rounded to two decimal places. Do not include symbols in your answer (i.e. % sign). Your Answer: Answer

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 16Q: Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual...

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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.
Suppose that Blake Companys total pretax difference from a change to FIFO was 100,000 and the company pays a bonus of 5% of its income before income taxes and bonus to employees. If Blake pays an additional bonus | based on the change in income, would it recognize any expense? If so, when and how much?
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?
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?
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.
A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
General Dynamics obtained a 0.5%-per-month $100 million loan to be repaid over a 5-year period. (a) What is the difference in the amount of interest in the second month’s payment if interest is charged on the original principal of the loan rather than on the unrecovered balance? (b) As months pass, for which basis—principal only or unrecovered balance—does the monthly interest decrease in amount?
Percentages need to be entered in decimal format, for instance 3% would be entered as .03. Cooley Industries needs an additional $500,000, which it plans to obtain through a factoring arrangement. The factor would purchase Cooley's accounts receivables and advance the invoice amount, minus a 2% commission, on the invoices purchased each month. Cooley sells on terms of net 30 days. In addition, the factor charges a 12% annual interest rate on the total invoice amount, to be deducted in advance. (This information is shown on the spreadsheet provided.) What amount of accounts receivable must be factored to net $500,000? If Cooley can reduce credit expenses by $3,500 per month and avoid bad debt losses of 2.5% on the factored amount as shown on the spreadsheet, what is the total dollar cost per month of the factoring arrangement? What would be the total cost of the factoring arrangement if Cooley's funding needs rose to $750,000? Would the factoring arrangement be profitable under…
Percentages need to be entered in decimal format, for instance 3% would be entered as .03.) Cooley Industries needs an additional $500,000, which it plans to obtain through a factoring arrangement. The factor would purchase Cooley's accounts receivables and advance the invoice amount, minus a 2% commission, on the invoices purchased each month. Cooley sells on terms of net 30 days. In addition, the factor charges a 12% annual interest rate on the total invoice amount, to be deducted in advance. (This information is shown on the spreadsheet provided.) Would it be to Cooley's advantage to offer to pay the factor a commission of 2.5% if it would lower the interest rate to 10.5% annually? Assume the firm needs $500,000. Explain your answer. Assume a commission of 2% and an interest rate of 12%. What would be the total cost of the factoring arrangement if Cooley's funding needs rose to $650,000? Would the factoring arrangement be profitable under these circumstances? Why or…
Suntech Distributors, Inc., deposits $4,000 at the beginning of each 3-month period for 7 years in an account paying 6% interest compounded quarterly. Round your answers to the nearest cent. a. How much will be in the account at the end of the 7-year period? $ b. What is the total amount of interest earned in this account?
Suppose you deposit D dollars at the beginning of each month into an account that pays a monthly rate of r as a decimal. Then, the balance B of the account after t months is given by B = D(1 + r) (1 + r)t − 1 r dollars. Suppose you deposit $160 at the beginning of each month into an account that pays a monthly rate of r = 0.005, which corresponds to an APR of 6%. How long does it take for the account balance to build to $2600? Report your answer to the nearest whole month. months
Maxwell Corporation recently issued 270-day commercial paper with a face value of $150,000 and a simple interest rate of 13% annually. What is the commercial paper's annual percentage rate (APR) assuming there are 360 days in a year? (Round all calculations to two decimal places.) a. 13.58% b. 15.72% c. 14.40% d. 13.90%