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- Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
- seller sold a duplex for 60,000 with closing schedules for june 24 this year. both units were rented november 1 last year at $180 each per month with the first and last months rents paid in adance. in addition, each tenant paid the seller a security deposit of $125. based upon 12 equal of 30 days each, and the day of closing belongs to the seler, how much of the combined rent payments and securty deposits will crdit to the buyer at closing.Jennifer is charged interest of 19.99% per annum on her credit card. Dec-01 Jennifer withdrew $500 as a cash advance from her credit card. Jennifer received her credit card statement, showing a minimum balance owing of Dec-31 $10, due by January 12 Jan-12 Jennifer paid the minimum balance of $10 Feb-12 Jennifer paid the minimum balance of $10 Mar-12 Jennifer paid the minimum balance of $10 Apr-01 Jennifer paid the full balance owing a) Compute the amount of interest charged during the month of December. 500* 19.99% * 31/365 = 8.48 Inrerest from 1st Jan to 11 Jan = 500 * 19.99% * 11/365 = 3.01 Total Interest till 12 Jan (8.48 +3.01) = 11.49 Net principal paid (11.49 - 10) = 1.49 7 b) What is the balance owing at the end of January? _8 BEGINNING BALANCE (500-1.4)* 19.99% * (31-11)/365 19 LESS DEPOSIT 20 RATE 21 T= 22 INEREST 23 BALANCE 24 25 c) What is the balance owing at the end of February? 26 LESS DEPOSIT 27 RATE 28 T= 29 INEREST 30 BALANCE 31 d) What is the balance owing at the end…Mrs. Smith is buying a new refrigerator for $1899 at Sears. There is 7.25% sales tax added to her purchase. She plans to charge this to her Sears credit card, which earns 18.9% APR. She wants to pay $225 per month to the credit card. Fill in the first 2 lines of the amortization table. Month Balance Interest Amt. Applied to Principal New Balance 1 $192.92 2 $29.04 $1647.80
- On September 1, Year 1, West Company borrowed $30,000 from Valley Bank. West agreed to pay interest annually at the rate of 5% per year. The note issued by West carried an 18-month term. West Company has a calendar year-end. What is the amount of interest expense that will be reported on West's income statement for Year 1? Multiple Choice $500 $375 $-0- $150Sue Needam Accounting Inc. takes advantage of a well-known office furnishings store's low-interest-rate financing. Sue buys furniture on the first day of its fiscal year, signing a $20,000, three-year note. The note is payable in full at maturity. Interest is payable annually at 3%. The market rate of interest for similar transactions is 5%. Requirement Prepare journal entries to record: a. The purchase of the office furniture. b. The payment of interest and related amortization of the discount at the end of year 1. (Use a financial calculator for any present value computations and round your final answers to the nearest dollar. Record debits first, then credits. Explanations are not required.) ... a. Prepare the journal entry to record the purchase of the office furniture. Accounts Debit Credit b. The payment of interest and related amortization of the discount at the end of year 1. Accounts Debit CreditOn August 2, Jun Co. receives a $7,500, 90-day, 14.0% note from customer Ryan Albany as payment on his $7,500 account. Prepare Jun's journal entry assuming the note is honored by the customer on October 31 of that same year. (Round your answers to nearest whole dollar value. Use 360 days a year.)
- Zetix borrowed $20,000 on a one-year, 10 percent note payable from the local bank on March 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed. RequirementsCalculate the amount of cash payments Zetix was required to make in each of the two calendar years that were affected by the note payable assuming accounting period ends on Dec. 31 each year. ii. Glen Pool Club, Inc., has a $300,000 mortgage liability. The mortgage is payable in monthly installments of $3000, which include interest computed at an annual rate of 12 percent.RequirementsPrepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage’s unpaid balance. (Round to the nearest dollar.)TJ made a loan of $16,000 to one of the company's employees on April 1, year 1. The one year note carried a 6% rate of interest. What is the amount of interest revenue that Rosewood would report in Year 1? A. $720 B. $0 C. $240 D. $960Garcia Company rents out a portion of its building to Jerry Company for $1,000 per month. On August 1, Jerry paid Garcia $12,000 for 1 year of rent in advance. Prepare journal entries for Garcia to record the collection of rent