Question
On January 1 st , 2014, Euston Plc. obtained a 3-year bank loan in the amount of $100,000. The principal and interest compounded at an
On January 1st, 2014, Euston Plc. obtained a 3-year bank loan in the amount of $100,000. The principal and interest compounded at an annual rate of 10% are due on December 31st, 2016.Euston did not record any transactions related to this loan. In addition, Euston failed to record $2,000 of interest earned on investments and the payment of$5,000 of salaries that had previously been accrued.As a result, net income for the fiscal year ended December 31st, 2014 is (overstated, understated, correct) and if wrong by how much:
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
13th edition
978-1-119-4110, 1119411483, 9781119411017, 978-1119411482
