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ponse Maps News Translate On 1st July firm X obtains a loan for 56.000 for 8-months, with interest of 3% paid in advance. 2 p

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Answer #1

Ans. Interest amount= 56000*3/100 * 8/12= 1120

Assuming year end on 31st Dec., current year is of 6 months, rest interest is prepaid.

Prepaid Interest= 1120*2/8= 280

Journal,

Interest To Bank 1120

Prepaid Interest To Interest 280

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