ZuoTi.Pro
Question

7. Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates...

7. Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates that the annual interest rate is 8%, payable on the 15th of each month, payments beginning July 15, 2016. Assume Bjork makes all interest payments when they are due. How much will Bjork, Inc. report on its 2016 income statement for interest expense?

a. $500

b. $5,500

c. $12,000

d. $6,000

e. $0

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Ans. (d) = $6000 interest expense = $150000 x 8X6 - 100 x 12 = $6000

0 0
Add a comment
Know the answer?
Add Answer to:
7. Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates that...

    Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates that the annual interest rate is 8%, payable on the 15th of each month, beginning July 15, 2016. Assume Bjork makes all interest payments when they are due. How much will Bjork, Inc. report on its 2016 balance sheet for interest payable? a. $0 b. $500 c. $6,000 d. $5,500 e. $12,000

  • On July 1st, 2016, Alligator Supplies Inc. purchased a large piece of machinery for $1,840,000. The...

    On July 1st, 2016, Alligator Supplies Inc. purchased a large piece of machinery for $1,840,000. The firm borrowed 65% of the money for the machinery from a bank and paid the remaining amount in cash. The bank gave the firm a loan requiring semiannual payments of $294,850 with a semiannual interest rate of 11%. Alligator Supplies records interest semiannually. What is the reduction in the note payable recorded by the firm on December 31st, 2016? Your Answer: Answer On July...

  • On January 1, 20X1, Sterling Inc. borrowed $100,000 cash from the Stevens Creek Bank on a...

    On January 1, 20X1, Sterling Inc. borrowed $100,000 cash from the Stevens Creek Bank on a note that carried a 6 percent annual rate of interest and a five-year term. The loan is to be repaid in annual payments of $23,741.69 on January 1 each year. The amount of the January 1, 20X2, payment applied to interest and to principal would be a. $6,000 / $94,000 b. $17,741.69 / $94,000 c. $4,935.50 / $82,258.31 d. $6,000 / $17,741.69

  • SCENARIO SIX Funama Limited borrowed K800,000 on 1st January 2014 from Palama Bank. The loan attracts...

    SCENARIO SIX Funama Limited borrowed K800,000 on 1st January 2014 from Palama Bank. The loan attracts interest rate of 10% per annum. The loan was for the construction of its office block. Construction commenced on 1st April 2014 and is likely to be completed on 31st March 2016. On 30th September 2014, construction works were suspended because of striking construction workers. However, construction works resumed on 1st January 2015. Note: Interest for the year to 31st December 2014 has been...

  • Punjab Company borrowed $114,000 from its bank. Punjab will repay $150,000 in 7 years. What is...

    Punjab Company borrowed $114,000 from its bank. Punjab will repay $150,000 in 7 years. What is the approximate interest rate that Punjab will incur on this loan, assuming annual compounding? 15.000

  • Following information relates to Acco Co. Beginning cash balance on July 1: $50,000. Cash receipts from...

    Following information relates to Acco Co. Beginning cash balance on July 1: $50,000. Cash receipts from sales: 27% is collected in the month of sale, 50% in the next month, and 23% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,720,000; June (actual), $1,200,000; and July (budgeted), $1,400,000. Payments on merchandise purchases: 54% in the month of purchase and 46% in the month following purchase. Purchases amounts are: June...

  • Following information relates to Acco Co. Beginning cash balance on July 1: $50,000. Cash receipts from...

    Following information relates to Acco Co. Beginning cash balance on July 1: $50,000. Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,720,000; June (actual), $1,200,000; and July (budgeted), $1,400,000. Payments on merchandise purchases: 60% in the month of purchase and 40% in the month following purchase. Purchases amounts are: June...

  • On July 1, 2019, Goode Company borrowed $150,000. The company signed a note payable with interest...

    On July 1, 2019, Goode Company borrowed $150,000. The company signed a note payable with interest at 8 percent per year. The note and interest are due on December 31, 2019. On December 31, 2019, Goode paid $156,000 to settle the debt in full. Assuming no accruals for interest have been made during the year, transaction analysis of the $156,000 cash payment on December 31, 2019 should reflect which of the following? Multiple Choice A decrease in stockholders' equity of...

  • On October 1, year 1, Kobe, Inc. borrowed $42,000 cash from the local bank. The loan...

    On October 1, year 1, Kobe, Inc. borrowed $42,000 cash from the local bank. The loan had a one-year term and a 6% annual interest rate. 1. What is the amount of interest expense that Kobe will recognize on its year 1 financial statements? 2. What is the amount of interest expense that Kobe will recognize on its year 2 financial statements? 3. Based solely on this transaction, what is Kobe's cash flow from operating activities in years 1 and...

  • Farraro Restaurant borrowed $150,000 on October 1 by signing a note payable to Metro One Bank....

    Farraro Restaurant borrowed $150,000 on October 1 by signing a note payable to Metro One Bank. The interest expense for each month $500. The loan agreement requires Farraro to pay interest on January 2 for Osbe November and December Read the rements 1. Make Farraro Travels during only to score monthly treat expense at October 31, a. November 30, and at December 31, Duto each entry and include is explanation Record debut first, then credits. Select the explanation on the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT