What annual interest rate should be used to record interest

Assignment Help Financial Accounting
Reference no: EM133007214

A two-year note was issued in an arm's-length transaction at face value solely for cash at the beginning of the year. There were no other rights or privileges exchanged. The interest rate is specified at 10 percent per year. Principal and interest are payable at maturity. The prevailing rate of interest for a loan of this type is 15 percent per year. What annual interest rate should be used to record interest expense for this year and next year?

This year             Next Year

10 percent           15 percent
10 percent           10 percent
15 percent           10 percent
15 percent           15 percent

Reference no: EM133007214

Questions Cloud

Affirmative action program : "Affirmative actions does not work. When you are hired under an affirmative action program, you are automatically labeled as such and are rarely recognized for
How will estate be distributed : How will his estate be distributed? Gordon Walker is recently single and lives on his own in Toronto. He has two adult sons with his wife
Direction of employee movement in a company : (a) Innovative mobility paths include any direction of employee movement in a company. Compare the three forms of innovative mobility paths with an example.
Do you have a mentor : Do you have a mentor? If so, describe the relationship and how the relationship has helped. If not, who are some people in your life that you could consider bei
What annual interest rate should be used to record interest : What annual interest rate should be used to record interest expense for this year and next year? A two-year note was issued in an arm's-length transaction.
Primary source of job creation : Why are new ventures in Canada (and much of the world) the primary source of job creation and new product/service ideas? Share an example.
Solve gain or loss on disposal for genetic insights co : Solve gain or loss on disposal. Genetic Insights Co. purchases an asset for $18,625. This asset qualifies as a seven-year recovery asset.
What is the option portfolio delta : A hedge fund manager has 1 million nine month call options. The options are funded half by loans and half by equity. What is the option portfolio delta
Monitoring and evaluating workforce plan : When monitoring and evaluating workforce plan. How revisions to the approach will be implemented. Please help me describe it and Identify any changes in the int

Reviews

Write a Review

Financial Accounting Questions & Answers

  Relevant accounts related to stockholders equity transaction

What are relevant accounts when auditing debt obligations, and what is the auditor's primary objective?-What are the relevant accounts related to stockholders' equity transactions?

  How many shares will be outstanding

The stock pays a 35 percent stock dividend. After the dividend: How many shares will be outstanding? What will be the price per share?

  What is the compensation expense at end of the second year

On January 1, the company granted 150,000 stock options to key employees. Each option allows an employee to buy one share of $1 par common stock for $25, which was the market price of the shares on the grant date of January 1. In order to be able to ..

  Determine faulkner taxable income

Prepare schedule (similar to those on Slide 30 in 3352-ppt18 Chapter 18) to show of all the taxable/deductible temporary (timing) differences

  Calculate the Present Value of this annuity

An annuity pays $5,000 per month for 5 years at an annual interest rate of 7.5% compounded monthly. Calculate the Present Value of this annuity

  Which investment provides ljb with the lowest total cost

The LJB Company must replace a freezer. Which investment provides LJB with the lowest total cost? The LJB Company's cost of capital is 8 percent.

  Recorded cost of the completed factory building should be

On February 12 2015, Laker Company purchased a tract of land as a factory site for $175,000. An existing building on the property was razed and construction was begun on a new factory building in March of the same year. The recorded cost of the compl..

  Construct a table of the annual cash flows for spoonfey ltd

Construct a table of the annual cash flows for Spoonfey's nailfile project and calculate the NPV of the project using a discount rate of 12%.

  Strategic assessment of the sample break-even analysis

Prepare a strategic assessment of the sample break-even analysis your research. within your assessment, discuss when it is appropriate to use a break-even analysis and how a break-even analysis is done?

  What amount of doubtful debts expense will dejong company

What amount of doubtful debts expense will DeJong Company report if it uses the direct write-off method of accounting for doubtful debts?

  What is the days sales in inventory ratio for the year

A company has sales of $5,537,000, a gross profit ratio of 35%, ending merchandise inventory of $261,425, and total current assets of $3,039,600. What is the days sales' in inventory ratio for the year?

  Provide perspectives that the company could examine

Chocolate Delight Company, Using a balanced scorecard, identify and provide a specific example of two (2) perspectives that the company could examine

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!

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