Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
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Chapter 4, Problem 4.16.2E
To determine
Concept Introduction:
Loans are taken to finance the capital requirements of the business. Loans are recorded as liability and interest on these loans is recorded on accrual basis.
To identify: The adjustments to be made in the month of March and April 2017.
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On July 1, 2016, 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
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answer is D, explain with joural entries made on Dec 31 2017 and adjusting entries come May 21 2018.
Chapter 4 Solutions
Using Financial Accounting Information
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