Question

Hi. Please explain me why the answer right and wrong. Make it clear please, thanks!

Question 9 0 out of 1 points On anuary 1 Year 1 Stratton Company borrowed $140,000 on a 10-year 6% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $19,022 each December 31 for 10 years. The required general journal entry to record the payment on the nóte on December 31, Year 2 is: Debit Interest Expense $8400: debit Notes Payable $10,622; credit Cash $19,022 Debit Notes Payable $140,000; debit interest Expense $5022; credit Cash $19,022 Debit Interest Expense $7763 debit Notes Payable S 11,25% credit Cash S 19.022. Debit Interest Expense 58400; debit Notes Payable $10,622 credit Cash $19,022. Debit Notes Payable $8400; debit Interest Expense $10,622, credit Cash $19,022 Debit Notes Payable $19,022: credit Cash $19,022 Selected Answer: Answers:

Answer 1

as per HomeworkLib policy i am to answer first 4 questions still i am answering first 5 questions , for rest kindly repost i am sure you will be helped

Ques 9
hence your answer debit interest epense 7763 ; notes payabe 11259 and credit cash 19022
Time	Opening Balance	EMI	Intt @ 6%	Principal (EMI-Intt)	Closing Balnce
1	$                140,000	$   19,022	$     8,400	$                       10,622	$           129,378
2	$                129,378	$   19,022	$     7,763	$                       11,259	$           118,119
3	$                118,119	$   19,022	$     7,087	$                       11,935	$           106,184
4	$                106,184	$   19,022	$     6,371	$                       12,651	$             93,533
5	$                  93,533	$   19,022	$     5,612	$                       13,410	$             80,123
6	$                  80,123	$   19,022	$     4,807	$                       14,215	$             65,908
7	$                  65,908	$   19,022	$     3,954	$                       15,068	$             50,841
8	$                  50,841	$   19,022	$     3,050	$                       15,972	$             34,869
9	$                  34,869	$   19,022	$     2,092	$                       16,930	$             17,939
10	$                  17,939	$   19,022	$     1,076	$                       17,939	$                        0
Que 10
semi-annual interest = 260000 * 9%*6/12 =			11700
ao there will total 6 interest payments
present value of
always when there are semi annual payments 2 changes happen interest rate is halved and time is doubled
annual interest = 11700 * PVIFA (i=5% , t= 6years)=11700*5.0757=					59385.69
principal repayment = 260000 * PVIF (i=5% , t= 6 year)=260000*0.7513=					194012
total					$           253,398
Ques 11
so on year end december 31 , you would have accrued
66000*9%*60/360 days =		$         990	interest
so this would be recorded as laibilty in the books In the name of
"Interest payable"
so on march 1 since no reversing entry has been made , this account needs to be closed , because
the note will be paid off
so we close the interest payable account by debiting it
Ques 12
SLM = (Cost -Salvage value) / useful life
SLM=(24000-2400)/4=		5400
In year 2 also the same depriciation will be recognised since the straight line
method we assume the same depriciation every year
Ques 13
Gross Pay	$              9,188.00
Social security	$                  569.66	9188*6.2%
Medicare	$                  133.23	9188*1.45%
witholding taxes	$              1,524.57
Net pay	$              6,960.55