Here\'s the deal. I need help with these two accounting questions. I\'ll only ra
ID: 2380518 • Letter: H
Question
Here's the deal. I need help with these two accounting questions. I'll only rate best answer if you show work of how you got your answer.
A bond with a face value of $100,000 and a quoted price of 98 1/4 has a selling price of
A, $98,250.
B. $98,025.
C. $98,002.
D. $98,500.
On October 1, Jane's Painting Service borrows $50,000 from National Bank on a 3-month, $50,000, 6% note.
What entry must Jane's Painting Service make on December 31 before financial statements are prepared?
A. Debit Interest Expense, $750; Credit Notes Payable, $750
B. Debit Interest Expense, $750; Credit Interest Payable, $750
C. Debit Interest Expense, $3,000; Credit Interest Payable, $3,000
D. Debit Interest Payable, $750; Credit Interest Expense, $750
A bond with a face value of $100,000 and a quoted price of 98 1/4 has a selling price of On October 1, Jane's Painting Service borrows $50,000 from National Bank on a 3-month, $50,000, 6% note. What entry must Jane's Painting Service make on December 31 before financial statements are prepared?Explanation / Answer
Hi,
Please find the answer as follows:
Part A:
98 1/4 indicates a selling price of 98.25 (1/4 = .25)
Total Selling Price = 100000*98.25 = 98250
Option A (98250) is correct.
Part B:
Interest Expense (50000*.06*3/12) Dr. 750
Interest Payable Cr. 750
Option B is correct.
Thanks.