Question
A small business borrows 48600 from the bank on Aug 31 of their first year to purchase equipment. The loan that they are given has
A small business borrows 48600 from the bank on Aug 31 of their first year to purchase equipment. The loan that they are given has a 6-year term with 8% interest. The payment dates for the business are Feb 28 and Aug 31. The company's year-end is December 31.
Given the information above, what is the interest payable and expense that is recognized in the company's books at year-end(December 31) in year 1? How much is the loan payable amount that is cancelled on Feb 28 of year 2?
Step by Step Solution
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Step: 1
To calculate the interest payable and expense at yearend December 31 in year 1 we first need to dete...
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
