Question

Chapter 9 Help At the end of each year, you plan to deposit $2,600 in a savings account. The account will earn 8% annual interest, which will be added to the fund balance at year-end. The first deposit will be made at the end of Year 1. (FV of $1. PV of $1, EVA OR $1and PVA of $11, (Use the appropriate factor(s) from the tables provided.) Required: 1. Assume you follow GAAP. Prepare the required journal entry at the end of Year 1. 2. What will be the balance in the savings account at the end of the 10th year (ie, after 10 deposits)? 3. What is the interest earned on the 10 deposits? 4. How much interest revenue did the fund earn in the second year? In the third year? 5. Assume you follow GAAP. Prepare the all required journal entries at the end of the second and third years. Complete this question by entering your answers in the tabs below. Reg 1 Req 2 and 3 Reg 4 Reg 5 Prepare the required journal entry at the end of Year 1. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record the required journal entry on December 31, Year 1.

Answer 1

Page No ③ Answers © Towenal embang ate goed of year ! Date Account bitle dec 31, Bank - saving account To cash Debit I Gedit $2600 Yearl $2600 @ Ending balances sont end of your Opening balance = Bebore year ending balance Deposit = $ 2600 Interest - Opening balance x 8%. Ending balance = opening balance + Deposit + Interest Year Opening balance Deposit Interest Ending balance $2600 $0 $2600 $2600 * 2600 $208 *5408 $2600 $433 $ 8441 $8441 $2600 $675 $ 11716 $11716 $ 2600 $937 $15253 $15253 $ 2600 $ 1220 $ 19073 $19073 $ 2600 #1526 $23199 $2600 $ 1856 $27655 $ 27655 $ 2600 $2212 $ 32467 $ 2600 $ 35664 $0 $5408 A ft A 4 - am I tooroo og $ 23199 32467 $ 2594

Page No @ Til Ending balance ato end of year 10 - $34664] ☺ meinterest earned or to deposits Inis en est Patna OD 10 dCpOSTI wm u U Tobal deposits amount = $ 2600 x 10 = $26000 Ending balance saving accounts after 10 years = $ 37664 Interest earned on 10 depcails = 37664 - 26000 11664 1. Interest earned on 10 deposits = $11664 © Coberest revenue Yeau ? [ Year 3 from cause 6 interest revenue En Year 2 - $208 Interest revenue in 420913 = $433

Page No ③ Debit Credit dec 31, $ 2600 o rewnal entries I Date Account title Bank - saving account Year 2 To cash Bank - saving account o hikeast devenue $2600 $ 208 $ 208 dec. 31, Year 3 $2600 Bank - saving account Dr. 1. To cash $2600 $433 Bank -- Sowing account Dr To interest revenue $ 433