User Account

All Pages

Prepare the journal entry drake should record

Assignment Help Accounting Basics
Reference no: EM131774097

Information for Problems 1 and 2:

Drake, Inc has two loans recorded on its books. Loan 1 was obtained on January 1, Year 1, and Loan 2 was entered into on January 1, Year 2. Drake's year end is December 31. For the two situations related to the loans below, prepare the appropriate journal entries. Each loan should be accounted for independent of the other loan. Round numbers to the nearest dollar.

Loan 1 is a 4%, five-year balloon loan for $3,000,000 with interest due and paid annually on December 31. Drake records interest annually on December 31. Drake incorrectly recorded the journal entry for the Year 1 interest expense and payment as a debit to accrued interest payable and a credit to cash. Prepare the net journal entry (entries) to correct Year 1 and properly record the interest attributable to the loan as of, and for the year ended December 31, Year 2.

Loan 2 is an 8%, $1,000,000 loan with interest due annually on December 31. Drake did not record or pay the required Year 2 interest payment until January 1, Year 3. Prepare the journal entry (entries) Drake should record at December 31, Year 2.

Reference no: EM131774097

Questions Cloud

Explain the effect of the policy on investment : What would be the effects of this policy the decrease in government spending on equilibrium output in the hat goods market? Explain ho and why equilibrium.
Demonstrate the ability to communicate complex issues : Demonstrate a systematic understanding and critical evaluation of the key assess of the strategic management process - evaluate theories and concepts
Explain fundamental concept of supply chain management : Explain the fundamental concept of supply chain management and illustrate the critical components of the process.
Estimate amount that students spend on economics textbooks : Explain two estimation techniques you can use to estimate the amount that students spend on economics textbooks.
Prepare the journal entry drake should record : prepare the appropriate journal entries. Each loan should be accounted for independent of the other loan
Summary of your consulting firm performance : Complete a 1 page summary of your consulting firm’s performance describing how you are assessing and evaluating.
Removal of the tariff would cause domestic output : Suppose an industry receives protection from the government in the form of tariffs. A number of years later, it is observed that the quantity supplied.
Discuss what is tennis pros virginia state tax liability : Assuming a Virginia corporate tax rate of 5.5 percent, what is Tennis Pros Virginia state tax liability
What is the breakeven point in units : Alpha selling price is $100 per unit, variable cost is $50 per unit and fixed cost is $2,500. What is the breakeven point in units

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd