Homework Answers
| Annual interest = $18000*% | ||||||
| =$720 | ||||||
| 31/12/2016 interest payable would be = $720-480 = $240 | ||||||
| Interest up to august to be charged to income statement = $720/12* 8 =$480 | ||||||
| The journal entry on 30/08/2017 would be | ||||||
| Date | Account Title | Debit | Credit | |||
| Interest expenses | $ 480 | |||||
| Interest On loan payable | $ 240 | |||||
| Loan | $ 3,780 | |||||
| Cash | $ 4,500 | |||||
| Interest expenses would result into reduction of retained earning hence it would not be considered as changes in liabilities. | ||||||
| therefore we can find that | ||||||
| The first statement is correct | ||||||
| The second statement is correct. | ||||||
| The third Statement is correct | ||||||
| The first statement is correct | ||||||
| Therefore All the above statements are correct. | ||||||
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On 8/30/16 a company borrows $18,000 from a local bank. The principal is required to be...
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be recorded for interest expense at March 31, 2016 assuming the
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by signing a 6-month, 8%, interest-bearing note.
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(Credit account titles are automatically indented when
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