Reference no: EM131224096
On January 1, 2015, Bailey Company obtained an $125,000, seven year 5% installment note from First National Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352.
1. Journalize the following entries:
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
a. Issued the installment notes for cash on January 1, 2015.
b. Paid the first annual payment on the note.
2. Determine the amount of interest expense on the note for the first year.
Reason for holding long-term investments
: Which of the following listed below is not a reason for holding long-term investments?
|
Amortization of premium using the straight-line method
: On the first day of the fiscal year, Nixon Company issues a $923,000, 7%, 10-year bond that pays semi-annual interest of $32,305 ($923,000 x 7% x 1/2), receiving cash of $969,200. Journalize the entry to record the first interest payment and amortiza..
|
Adopted for the amortization of bond discount or premium
: Truman Corporation issues for cash $2,000,000 of 8%, 15-year bonds, interest payable annually, at a time when the market rate of interest is 7%. The straight-line method is adopted for the amortization of bond discount or premium.
|
Trading and available-for-sales investments
: Trading and available-for-sales investments are
|
The note requires annual payments-compound transaction
: On January 1, 2015, Bailey Company obtained an $125,000, seven year 5% installment note from First National Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. For a compound transa..
|
Analyze the financial position of this corporation
: Choose a publicly traded company, and identify the sources that you would use, other than the financial statements, to analyze the financial position of this corporation. Find at least two resources, other than the financial statements, that provide ..
|
Define direct costs and indirect costs
: Define direct costs. Define Indirect costs. Why are direct and indirect costs important to management? Would you describe your current job today as a direct cost or a indirect cost? Why?
|
Journal entries for the original purchase dividend and sale
: On February 12, Bearkat Corporation purchased 6,000 shares of Lucas Company at $22 per share plus a $240 brokerage fee. On August 22, Lucas paid a $0.42 dividend per share. On November 10, 4,000 shares of Lucas stock were sold for $28 per share less ..
|
Journal entry to record the receipt of interest
: Clinton, Inc. purchased $100,000 of Hope Corporation bonds at 100. The bond interest rate is 8% and interest is paid semi-annually. The journal entry to record the receipt of interest on the next interest payment date would be:
|