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What is the interest paid from oct to the end of dec

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Problem 1: What is the interest paid from Oct to the end of Dec 31st and what would be the depreciation of the baking equipment?

October 3: The company borrowed $10,000 in cash, in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.

October 13: The owner has baking equipment, including an oven and mixer, which they have been using for their home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $5,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a five-year useful life.

On December 31, the following adjustments must be made:

  • Depreciation of baking equipment transferred to company on October 13. Assume half month of depreciation in October using the straight-line method.
  • Accrue interest for note payable. Assume a full month of interest for October. (6% annual interest on $10,000 loan)

Reference no: EM132905791

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