Answer:
Follows are the responses to the given question:
Explanation:
The same is always (2) and (3). This entry type which will raise the balance of the account is the typical balance expenditures, assets, earnings, and borrowing accounts are boosted by debits and reduced by loans. Credits increase income, liability, capital stocks, and owner's account and debits.
Asset:
Option b. Equipment
Option e. Cash
Option g. Prepaid Insurance
Option h. Land
Option i. Accounts Receivable
Liability:
Option c. Notes Payable
Option l. Unearned Revenue
Equity:
Option d. Common Stock
Option j. Dividends
Revenue:
Option k. License Fee Revenue
Option a. Fees Earned
Expense:
Option f. Legal Expense
Your grandparents would like to establish a trust fund that will pay you and your heirs $205,000 per year forever with the first payment 12 years from today. If the trust fund earns an annual return of 4 percent, how much must your grandparents deposit today?
Answer:
PV= $3,201,059.88
Explanation:
Giving the following information:
Annual cash flow= $205,000
First payment= 12 years from today
Interest rate= 4%
First, we need to calculate the value of the account 12 years from today. We need to use the following formula:
FV= Cf/ i
FV= 205,000 / 0.04
FV= $5,125,000
Now, the amount to be deposited today:
PV= FV / (1 + i)^n
PV= 5,125,000 / (1.04^12)
PV= $3,201,059.88
In evaluating the profit center manager, the income from operations should be compared a.across profit centers b.to historical performance or budget c.to the competitor's net income d.to the total company earnings per share
Answer: to historical performance or budget
Explanation:
A profit center in a business is a division that is able to make revenues independently and contribute to the revenue of the entire business. In evaluating the performance of a profit center manager, it is best to compare the performance to a budget or their historical performance.
This is because profit centers engage in different businesses and so their revenue making style will be unique. Some profit centers will make more than others because of the goods they produce or the way they produce it. It is therefore best to compare a profit center to an internal measure such as the budget and historical performance.
If the profit center exceeds either of these then they are performing well.
Which of the following should be included in the acquisition cost of a piece of equipment? installation costs transportation costs testing costs prior to placing the equipment into production All of these choices are correct.
Answer: All of these choices are correct.
Explanation:
Acquisition cost is the total amount of money incurred in purchasing an asset. The acquisition cost should include all the expenses that are incurred such as:
• installation costs
• transportation costs
• testing costs prior to placing the equipment into production
Therefore, the correct option is "All of the above".
this is not only a value in itself but a value that guarantees other values. a. patience. b.fairness. c.respect. d integrity
Answer: Integrity
Explanation:
Integrity isn't only a value in itself but a value that guarantees other values. Integrity means to be true to ones values and act in accordance to those values.
A person with integrity has ethical principles and always does the right thing. Employees like people who have integrity Workers build relationships based on integrity.
Ms. Newcastle has $60,000 income this year and $40,000 next year. The market interest rate is 10% per year (Ms. Newcastle can both lend and borrow at this rate). Suppose Ms. Newcastle wishes to consume $62,000 next year. What will be her consumption this year
Answer:
$40,000
Explanation:
Calculation to determine What will be her consumption this year
Using this formula
Consumption=Current Income-(Next year consumption-Next year income/1+Market interest rate)
Let plug in the formula
Consumption=$60,000-[($62,000-$40,000)/(1+.10)]
Consumption=$60,000-($62,000-$40,000/1.1)
Consumption=$60,000 - ($22,000/1.1)
Consumption=$60,000-$20,000
Consumption=$40,000
Therefore What will be her consumption this year is $40,000
Santoyo Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:
Hours
Wait time 30.2
Process time 0.4
Inspection time 0.2
Move time 3.6
Queue time 8.7
The delivery cycle time was:__________.
a. 3.6 Hours
b. 12.3 Hours
c. 42.5 Hours
d. 43.1 Hours
Answer:
d. 43.1 Hours
Explanation:
Calculation to determine what The delivery cycle time was
Using this formula
Delivery cycle time = Wait time + Process time + Inspection time + Move time + Queue time
Let plug in the formula
Delivery cycle time= 30.2 + 0.4 + 0.2+ 3.6 + 8.7
Delivery cycle time= 43.1 Hours
Therefore The delivery cycle time was:43.1 Hours
What is the critical issues confronting WCC North America and what changes, if any, should be initiated to address the critical issues?
Answer and Explanation:
What is the critical issues confronting WCC North America?
WCC North America faces a supply chain management issue whereby there are lapses in integrating divisions within the organization resulting in complications with determining order status of customers.
What changes, if any, should be initiated to address the critical issues?
The text "Supply Chain Logistics Management, by Donald J. Bowersox, David J. Closs, M. Bixby Cooper, John C. Bowersox, 2013" mentions the need to address the critical issue of WCC North America by setting up a system that populates data of customer order status,recognizing them as high volume key accounts, in order to keep order response efficient and effective.
Shidan Apartments purchased an apartment building to rent to university students on November 18, 2017. The following costs were incurred during 2017, before the tenants moved in: Purchase price of the building $220,000 Purchase price of the land 100,000 Transfer taxes 10,000 Interest incurred on the mortgage loan to purchase 4,000 Attorney and real estate agent's fees 15,000 Repave the parking lot 6,000 How much will Shidan Apartments record as an asset
Answer:
$351,000
Explanation:
The computation of the amount of an asset is as follows;
Purchase price of the building $220,000
Purchase price of the land $100,000
Transfer taxes $10,000
Attorney and real estate agent's fees $15,000
Repave the parking lot $6,000
Cost of apartment $351,000
hence, the cost of an apartment is $351,000
Revenue of a segment includes A. only sales to unaffiliated customers B. Sales to unaffiliated customers and intersegment sales c. Sales to unaffiliated customers and interest revenue d. Sales to unaffiliated customers and other revenue and gains
Answer: Sales to unaffiliated customers and intersegment sales
Explanation:
A segment refers to a business component of a business which generates its own revenues.
Revenue of a segment includes the sales to unaffiliated customers and intersegment sales. Therefore, the correct option is B.
The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. Due to higher demand, they have decided to operate three 8-hour shifts instead with one employee. They are now able to produce 600 boxes per day. What has happened to productivity?A. Productivity has not changed.B. It has increased by 4.17 boxes/hr.C. It has increased by 25%.D. It has decreased by 8.3%.
Answer:
A
Explanation:
Productivity = total boxes produced / total hours
Before increased demanded = 500 / (10 x 2) = 25 boxes / hour was produced
after increased demanded = 600 / (8 x 3) = 25 boxes / hour
the number of boxes produced before and after the increase in the number of shifts remains the same. Thus, there is no change in productivity
Claire and Don are farmers who produce beef and corn. In a year, Claire can produce 40 tons of beef or 160 bushels of corn. In a year, Don can produce 10 tons of beef or 20 bushels of corn. How do Clair and Don maximize their total output of beef and corn?
A. Claire produces beef and corn while Don produces nothing.
B. Claire produces beef and Don produces com.
C. Claire and Don each spend half of their time producing beef and the other half producing corn.
D. Don produces beef and Claire produces com.
Two methods are used to predict how many customers will call in for help in the next four days. The first method predicts the number of callers to be 23, 5, 14, and 20 for the four respective days. The second method predicts 20, 13, 14, and 20 for the four respective days. The actual number of callers turns out to be 23, 10, 15, and 19. Which method has the bigger forecast bias?
a- the second methodb- both are equally biasedc- both are not biasedd- the first method
Answer:
The method that has the bigger forecast bias is:
the first method.
Explanation:
a) Data and Calculations:
Days 1 2 3 4 Total
First method, number of callers predicted 23 5 14 20 62
Second method, number of callers predicted 20 13 14 20 67
Actual number of callers 23 10 15 19 67
Comparison with actual callers:
Actual number of callers 23 10 15 19 67
First method, number of callers predicted 23 5 14 20 62
Forecast bias 0 -5 -1 +1 -5
Comparison with actual callers:
Actual number of callers 23 10 15 19 67
Second method, number of callers predicted 20 13 14 20 67
Forecast bias -3 +3 -1 +1 0
b) A forecast bias between first method of prediction and actual number of callers occurs because there is a difference between the total actual number of callers and the total predicted forecasts of callers. But there is no difference between the total actual number of callers and the predicted forecasts of the callers for method two.
Predictions are termed as the forecasting of the uncertain event or the happening. These are also dependent on the probability of whether the event has to have occurred or have the ratio of changes to occur.
The correct answer for the method that has the bigger forecast bias is the first method.
a) Data and Calculations:
Days 1 2 3 4 Total
First method, number of callers predicted 23 5 14 20 62
Second method, number of callers predicted 20 13 14 20 67
Actual number of callers 23 10 15 19 67
Comparison with actual callers:
Actual number of callers 23 10 15 19 67
The first method, number of callers predicted 23 5 14 20 62
Forecast bias 0 -5 -1 +1 -5
Comparison with actual callers:
Actual number of callers 23 10 15 19 67
Second method, number of callers predicted 20 13 14 20 67
Forecast bias -3 +3 -1 +1 0
b) There is a projection imbalance between the first technique of prognosis and the actual number of callers because there is a mismatch between the total actual number of callers and the total predicted forecasts of callers. However, there is no difference between the total number of actual callers and the projected caller projections in approach two.
To know more about the forecast bias, refer to the link below:
https://brainly.com/question/799559
ou expect a share of stock to pay dividends of $1.30, $1.55, and $1.60 in each of the next 3 years. You believe the stock will sell for $22.00 at the end of the third year.a. What is the stock price if the discount rate for the stock is 20%
Answer:
The stock price will be "$15.80".
Explanation:
According to the question,
Div 1,
= 1.30
Div 2,
= 1.55
Div 3,
= 1.60
P1 = 22
Now,
The current stock price will be:
Po = [tex]\frac{Div\ 1}{(1+discount \ rate)} +\frac{Div\ 2}{(1+discount \ rate)^2} +\frac{Div \ 3+P1}{(1+discount \ rate)^3}[/tex]
By putting the values, we get
= [tex]\frac{1.30}{1.20} +\frac{1.55}{(1.20)^2} +\frac{(1.60+22)}{(1.20)^3}[/tex]
= [tex]1.08+1.07+13.65[/tex]
= [tex]15.80[/tex] ($)
A director who becomes involved in litigation because of his or her position has no right to be indemnified for the costs. a. True b. False
Answer:
b. False
Explanation:
A corporation can be defined as a corporate organization that has facilities and owns or controls assets used for the production of goods and services in at least one country other than its headquarter (home office) located in its home country.
This ultimately implies that, a corporation is a corporate organization that owns or controls its business in two or more countries.
It is considered to be one of the most complicated and expensive type of organization.
Generally, a corporation is considered to be perpetual in nature and it is a body that comprises of a group of people such as directors, shareholders etc., who act as a single entity.
One of the advantage of a corporation is that, owners have limited liability for debt to the extent to which they have invested and as such are not personally liable for some of debt owed by corporation.
Hence, a director who becomes involved in litigation because of his or her position has a right to be indemnified or reimbursed for the costs involved or incurred.
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division Queensland New South Wales Sales $ 1,080,000 $ 2,385,000 Average operating assets $ 600,000 $ 530,000 Net operating income $ 70,200 $ 83,475 Property, plant, and equipment (net) $ 241,000 $ 191,000 Required: 1. Compute each division's margin, turnover, and return on investment (ROI). 2. Which divisional manager seems to be doing the better job
Answer:
1. Quuen Land Division
Margin 6.50%
ROI 11.70%
New South Wale Division Margin
Margin 3.50%
ROI 15.75%
2. New South wale Division
Explanation:
1. Computation for each division's margin, turnover, and return on investment (ROI)
QUUEN LAND DIVISION MARGIN
Using this formula
Margin =Net operating income/Total Sales
Let plug in the formula
Margin =$70,200/ $ 1,080,000
Margin=6.50%
QUUEN LAND DIVISION ROI
First step is to determine the Turnover using this formula
Turnover=Total sales/Average Asset
Let plug in the formula
Turnover= $ 1,080,000 /$600,000
Turnover =1.8 times
Now let determine the ROI using this formula
ROI =Margin * Turnover
Let plug in the formula
ROI=6.50%*1.8
ROI=11.70%
NEW SOUTH WALE DIVISION MARGIN
Margin =$ 83,475 / $ 2,385,000
Margin=3.5%
NEW SOUTH WALE DIVISION ROI
First step is to determine the Turnover using this formula
Turnover=Total sales/Average Asset
Let plug in the formula
Turnover= $ 2,385,000 /$530,000
Turnover =4.5 times
Now let determine the ROI using this formula
ROI =Margin * Turnover
Let plug in the formula
ROI=3.5%*4.5
RO1=15.75%
2. Based on the above calculation the divisional manager that seems to be doing the better job
Is NEW SOUTH WALE DIVISION because the ROI is greater.
At Cool Clothes Inc., there is a total focus on providing care and satisfaction to each customer. In the major clients division, each manager is assigned three employees to supervise, whereas in the product assembly division, each manager supervises about 15 employees. The major clients division managers can be described as having _____, as opposed to _____ for the product assembly division managers.
Answer: a narrow span of control; a wide span of control
Explanation:
Based on the information given, the major clients division managers can be described as having a narrow span of control, as opposed to a wide span of control for the product assembly division managers.
The span of control simply means the number of subordinates that are under the direct control and supervised by a certain manager.
Since we are informed that while in the major clients division, every manager is assigned three employees to supervise, whereas in the product assembly division, each manager supervises about 15 employees, then product assembly division managers has a wide span of control.
Carol Co. prepares a statement of cash flows starting with net income and then adjusting for items necessary to obtain net cash provided or used by operating activities. Carol Co. must be using the______method of reporting the statement of cash flows.
Answer:
indirect
Explanation:
From the question we are informed about Carol Co. prepares a statement of cash flows which start with net income and then adjusting for items necessary to obtain net cash provided or used by operating activities. In this case, Carol Co. must be using the
indirect method of reporting the statement of cash flows. In financial accounting, cash flow statement can be regarded as financial statement which express the way changes in balance sheet accounts as well as income affect cash and cash equivalents, and also give the analysis breakdown to operating, financing as well as investingactivities.
The methods for reporting statement of cash flows could be Direct or indirect method.
The indirect method can be regarded as method that gives presentation of the statement of cash flows by strating
with net income or net loss, along with deduction or additions to the amount for non-cash revenue and expense items or from them which comes subsequently, which then results to cash flow from operating activities.
Stanley Corp. had 100,000 shares of common stock outstanding throughout 2004. It also had 20,000 stock options with an exercise price of $20 and another 20,000 options with an exercise price of $28. The average market price for the company's stock was $25 throughout the year. The stock closed at $30 on December 31, 2004. What are the number of shares used to calculate diluted earnings per share for the year?
Answer:
104,000
Explanation:
Calculation to determine the number of shares used to calculate diluted earnings per share for the year
Using this formula
Number of shares=Additional shares+Common shares outstanding
Let plug in the formula
Number of shares=(20,000 − [(20,000 × 20) / 25])+100,000
Number of shares=4,000+100,000
Number of shares=104,000
Therefore the number of shares used to calculate diluted earnings per share for the year is 104,000
Tri Town Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Middleton Home and Garden Expo. The exhibit will cost the company $14,980 for space. At the show, Tri Town Interiors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs.
The company estimates that revenue will increase by $40,060 over the next year as a result of the exhibit. For the previous year, profit was as follows: $213,615 $18,106 81,459 56,285 18,811 Revenue Less: Design supplies Salary of Samantha Spade (owner) Salary of Kim Bridesdale (full-time employee) Rent Utilities Depreciation of office equipment Printing of advertising materials Advertising in Middleton Journal Travel expenses other than depreciation of autos Depreciation of company cars Net income 6,570 4,000 812 3,080 2,890 9,930 201,943 $11,672
Assume that design supplies and travel other than depreciation are variable costs.
Calculate the impact of the exhibit on company profit. (Round intermediate calculations to 4 decimal places, e.g. 0.3215 and final answer to 0 decimal places, e.g. 125.)
Company profit will _______ by _______
Should the company exhibit at the home show?
The company ________ exhibit at the home show.
Answer:
Tri Town Interiors
Company profit will increase by $21,272.
The company should exhibit at the home show.
Explanation:
a) Data and Calculations:
Cost of the exhibit = $14,980
Increase in revenue from the exhibit = $40,060
Increase in revenue from the exhibit = 19% ($40,060/$213,615 * 100)
Design supplies = $21,365 ($18,106 * 1.19)
Travel expenses other than depreciation of autos = $3,439 ($2,890 * 1.19)
Revenue $213,615 $253,675
Less:
Design supplies $18,106 $21,365
Salary of Samantha Spade (owner) 81,459 81,459
Salary of Kim Bridesdale
(full-time employee) 56,285 56,285
Rent 18,811 18,811
Utilities 6,570 6,570
Depreciation of office equipment 4,000 4,000
Printing of advertising materials 812 812
Advertising in Middleton Journal 3,080 3,080
Travel expenses other than
depreciation of autos 2,890 3,439
Cost of exhibit 14,980
Depreciation of company cars 9,930 201,943 9,930 220,731
Net income $11,672 $32,944
Increase in net income = $21,272 ($32,944 - $11,672)
Given the following data: Treasury Bill Maturity DTM Bid Asked Mar 90 1.20 1.15 If you invest $10,000 today at the risk-free rate, how much will you receive in 90 days
Answer: $10029
Explanation:
Based on the information given in the question, if $10000 is invested today at the risk-free rate, the amount that'll be received in 90 days will be calculated thus:
= Investment × (1 + Asked) × (DTM/360)
= 10000 + (1 + 0.0115) × (90/360)
= 10000 + 1.011 × 0.25
= 10029
Therefore, the answer is $10029
Wild Flowers Express has a debt-equity ratio of .60. The pretax cost of debt is 9 percent while the unlevered cost of capital is 14 percent. What is the cost of equity if the tax rate is 23 percent
Answer:
0.1631 ; 16.31%
Explanation:
Given:
Cost of capital = 14% = 0.14
Debt to equity ratio = 60% = 0.6
Cost of debt = 9% = 0.09
Tax rate = 23% = 0.23
Cost of equity : cost of capital + debt - to - equity ratio * (1 - tax rate) * (cost of capital - cost of debt)
Cost of equity = 0.14 + 0.60 × (1 - 0.23) × (0.14 - .09)
Cost of equity :
0.14 + 0.60 * 0.77 * 0.05
0.14 + 0.0231
= 0.1631 ; 0.1631 * 100% = 16.31%
At a total cost of $2,480,000, Herrera Corporation acquired 160,000 shares of Tran Corp. common stock as a long-term investment. Tran Corp. has 400,000 shares of common stock outstanding, including the shares acquired by Herrera Corporation.
Required:
Journalize the entries by Herrera Corporation.
Answer:
Explanation:
Journalizing is the approach taken by corporate organizations for recording daily operations and transactions in the organization. Organizations use it to produce the final accounts and assess the company's performance and productivity.
Assuming:
the current net income of the Tran Corp. = $510,000 &
A cash dividend of $1.10 / common share is paid by Tran Corp.
Then:
To record entry for income of Trans Corp:
Description Debit ($) Credit($)
Investment - Tran Corp. stock
(510000*(160000/400000) 204000
Tran Corp COmpany Income 204000
(To record income of Tran Corp Company)
The entry record for dividend received by cash:
Description Debit ($) Credit ($)
Cash (160000/1.10) 145,455
Investment - Tran Corp stock 145,455
(Record recieved dividend)
It has been argued that the traditional model of a full-service, lead advertising agency is becoming obsolete. Discuss the changes occurring in the industry and how they are affecting the traditional lead agency model.
Answer:
Quilt
Explanatio
Hope it's right
Answer:
to complex to solve without the artical.
Explanation:
because there is no artical it cant be answered.
A college uses advisors who work with all students in all divisions of the college. The most useful allocation basis for the salaries of these employees would likely be:
Answer:
d. number of students advised from each division
Explanation:
In the case when the college use the advisors who wants to work with the students for all type of divisions of the college. So here the distribution or allocation basis for the salaries should be depend upon the number of students that advised from each and every decision
Therefore as per the given situation, the option d is correct
Here are the U.S. tax rates and their corresponding tax brackets based on filing status for single individuals (i.e. not corporations) If taxable income is: Then income tax equals: Not over $9,875 10% of the taxable income Over $9,875 but not over $40,125 $987.50 plus 12% of the excess over $9,875 Over $40,125 but not over $85,525 $4,617.5 plus 22% of the excess over $40,125 Over $85,525 but not over $163,300 $14,605.5 plus 24% of the excess over $85,525 Over $163,300 but not over $207,350 $33,271.5 plus 32% of the excess over $163,300 Over $207,350 but not over $518,400 $47,367.5 plus 35% of the excess over $207,350 Over $518,400 $156,235 plus 37% of the excess over $518,400 Layla's taxable income for 2019 was $182,431. How much are her federal income taxes to the nearest dollar
Answer:
Layla's federal income taxes to the nearest dollar are:
= $39,393.
Explanation:
a) Data and Calculations:
Layla's taxable income
for 2019 = $182,431 Income Tax
Income tax on (163,300) = $33,271.50
Excess of $163,300 19,131 = $6,121.92 ($19,131 * 32%)
Total income tax payable = $39,393.42
U.S. Tax Rates and Corresponding Tax Brackets (Single Individuals)
If taxable income is: Then income tax equals:
Not over $9,875 10% of the taxable income Over $9,875 but not over $40,125 $987.50 plus 12% of the excess over $9,875
Over $40,125 but not over $85,525 $4,617.5 plus 22% of the excess over $40,125
Over $85,525 but not over $163,300 $14,605.5 plus 24% of the excess over $85,525
Over $163,300 but not over $207,350 $33,271.5 plus 32% of the excess over $163,300
Over $207,350 but not over $518,400 $47,367.5 plus 35% of the excess over $207,350
Over $518,400 $156,235 plus 37% of the excess over $518,400 Layla's taxable income for 2019 was $182,431
A bill was introduced into Congress last year suggesting changes to the income tax code. Congress now passed this new tax reform act in the last session and over the next few years the new laws will begin to impact the nation. This is an example of what type of policy
Answer:
Macroeconomic fiscal policy.
Explanation:
Macroeconomics can be defined as the study of behaviors, performance and factors that affect the entire economy. Hence, it focuses on aggregate phenomena such as price level, economic growth, Gross Domestic Product (GDP), inflation, unemployment and national income levels with respect to the central bank, demand or supply shocks, government policies, aggregate spending and savings.
Fiscal policy in economics refers to the use of government expenditures (spending) and revenues (taxation) in order to influence macroeconomic conditions such as Aggregate Demand (AD), inflation, and employment within a country. Fiscal policy is in relation to the Keynesian macroeconomic theory by John Maynard Keynes.
A fiscal policy affects combined demand through changes in government policies, spending and taxation which eventually impacts employment and standard of living plus consumer spending and investment.
According to the Keynesian theory, government spending or expenditures should be increased and taxes should be lowered when faced with a recession, in order to create employment and boost the buying power of consumers.
On Mar 3, L. Lyons withdrew $100 for personal use. Use your knowledge of what a correct journal entry should look like to identify what would be included.
Answer:
L. Lyons Company
Correct Journal Entry
Debit L.Lyons, Drawings $100
Credit Cash $100
To record the cash withdrawn by L. Lyons for personal use.
Explanation:
When the owner, L. Lyons, withdraws cash for personal use, it reduces the owner's equity interest in the business. Cash as an asset is also reduced by the same amount. Therefore, the double entry should be a debit to the Owner's Capital account (here represented by Drawings) and a credit to the Cash account.
Three months of rent were prepaid on May 1 for $7,200, but two months have now expired, leaving only one month prepaid at June 30. What is the amount of rent expense that will be recorded in the related adjusting entry dated June 30?a- $0b- $2,400c- $4,800d- $7,200
Answer:
b- $2,400
Explanation:
The computation of the amount that should be recorded is given below:
= 3 months rent ÷ number of months
= $7,200 ÷ 3 months
= $2,400
Hence, the amount of rent that should be recorded is $2,400
Therefore the option b is correct
The same should be considered
g A machine costing $58,944 with a 6-year life and $55,853 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation. Round your answer to the nearest whole dollar.
Answer:
$9,309
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
DEPRECIABLE COST / USEFUL LIIFE
$55,853 / 6 = $9,309
The adjusting entry to record the amortization of a discount on bonds payable is Group of answer choices debit Discount on Bonds Payable, credit Interest Expense debit Interest Expense, credit Discount on Bonds Payable debit Interest Expense, credit Cash debit Bonds Payable, credit Interest Expense
Answer:
The adjusting entry to record the amortization of a discount on bonds payable is:
debit Interest Expense, credit Discount on Bonds
Explanation:
The debit to the Interest Expense increases the Interest Expense (coupon interest) by the amortized discount for the period while the credit to the Discount on Bonds reduces the balance of the Discount on Bonds, which is originally a debit entry. Note that the amortized discount is calculated as the difference between the coupon interest and the interest on the Bonds Payable balance based on the effective interest method.
