Answer the following question:

Part A:

On December 1, 2021, Kllgren Inc. borrowed $420,000 from Simmonds Credit Union for nine (9) months at 8% annually, payable on the 1st of every month. The company has a December 31 year end. Which of the following statements is true? Show your work.

a) No entry would be made to interest expense until the end of the loan period, at the end of the nine months

b) The company would record a Dr. to Interest expense and a Cr. to Interest payable of $3,733.33 on December 31, 2021

c) The company would record a Dr. to Interest expense and a Cr. to Cash of $3,733.33 on January 1, 2022

d) The company would record a Dr. to Interest expense and a Cr. to Cash of $2,800 on January 1, 2022

e) The company would record a Dr. to Interest expense and a Cr. to Interest payable of $2,800 on December 31, 2021

Part B:

Kae Corp. sold machinery for $2,000,000 during 2020. The machinery was delivered, installed and tested during September 2020. On September 20, the customer informed Kae Corp, that they were satisfied with the machinery. Kae Corp. provided a warranty for two years from September 20, 2020 as assurance the machinery will work. The warranty can not be bought separately. The actual warranty costs incurred at Kae Corp.s fiscal year end of Dec. 31, 2020 was $285,000. Which of the following is true regarding warranty expense? Show your work.

a) On September 20, no warranty expense is recorded.

b) At fiscal year end the warranty expense account would have a balance of $285,000 DR.

c) At fiscal year end the warranty expense account would have a balance of $85,000 CR

d) At fiscal year end the warranty expense account would have a balance of $85,000 DR

e) Not enough information is given

Part C:

Where in the Statement of Cash flows would a gain on translation of foreign bank accounts be put?

a) Changes in value of cash flow hedges

b) As part of cash and cash equivalents

c) Cash flow from operations

d) Gains or losses on FVOCI items