Question
3. Kansas Enterprises purchased equipment for $73,000 on January 1, 2021. The equipment is expected to have a ten-year service life, with a residual value
3.
Kansas Enterprises purchased equipment for $73,000 on January 1, 2021. The equipment is expected to have a ten-year service life, with a residual value of $6,900 at the end of ten years. Using the straight-line method, depreciation expense for 2021 would be:
7.
The Pita Pit borrowed $201,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2022. In connection with this note, The Pita Pit should report interest expense at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)
8.
Which of the following is not an advantage of debt financing?
Multiple Choice
-
Interest is tax deductible.
-
The cost of borrowing may be lower than the return on equity.
-
The ownership interest of current stockholders is unchanged.
-
Debt financing often has no maturity date.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started