Unadjusted client trial balance reports

Reference no: EM133008604

Hurricane Corporation

Big Piece of Equipment purchased January, 2018. First payment was April 1, 2018

	Begin. Balance	Interest	Payment	Principal	Ending Balance
4/1/2018	800,000	24.000	53,775	29,775	770.225
7/1/2018	770.225	23.107	53,775	30.668	739,557
10/1/2018	739,557	22,187	53,775	31,588	707,969
1/1/2019	707.969	21.239	53.775	32,536	675,433
4/1/2019	675,433	20,263	53,775	33,512	641,921
7/1/2019	641,921	19,258	53,775	34.517	607,404
10/1/2019	607,404	18,222	53,775	35,553	571,851
1/1/2020	571,851	17,156	53,775	36,619	535,232
4/1/2020	535,232	16,057	53,775	37.718	497,514
7/1/2020	497,514	14.925	53,775	38,850	458,664
10/112020	458,664	13,760	53.775	40.015	418,649
I/1/2021	418,649	12,559	53.775	41,216	377,433
4/1/2021	377,433	11.323	53,775	42,452	334,981
7/1/2021	334,981	10,049	53,775	43,726	291,255
10/1/2021	291,255	8,738	53,775	45,037	246.218
1/1/2022	246,218	7,387	53,775	46,388	199,830
4/1/2022	199,830	5,995	53.775	47,780	152,050
7/1/2022	152,050	4,562	53.775	49,213	102,837
10/1/2022	102.837	3,085	53,775	50,690	52,147
1/1/2023	52,147	1.564	53,711	52,147	0

You are auditing a client which has an installment loan on a material piece of equipment. The audit program requires you to determine the fair presentation of interest expense. The company is on a calendar year. Prepare a workpaper to determine the fair presentation of interest expense. I am not going to tell you how do the calculation etc... You are provided with an accurate amortization table that the you harvested from your firm's permanent file. (you can assume the amortization schedule is accurate).

The unadjusted client trial balance reports interest expense of $48,138. THE AUDIT YEAR IS 2020

Hint: pretend you are getting married, don't forget to "propose"!

Reference no: EM133008604

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