Question
On September28,Reeve Incorporated purchased equipment with a purchase price of$38,313plus5%sales tax.Shipping terms were FOB Shipping Point and shipping charges were$259.Installation was completed,and the new equipment
On September28,Reeve Incorporated purchased equipment with a purchase price of$38,313plus5%sales tax.Shipping terms were FOB Shipping Point and shipping charges were$259.Installation was completed,and the new equipment was placed in service on October1.Installation costs totaled$905.The shipping and installation costs were paid for in cashonSeptember28.The equipment purchase price,including sales tax,was paid for by issuing a120day6%Note PayableonOctober1.Based on past experience,the equipment is expected to have a useful life of7years,at which time it will have an estimated worth of$4,462.The equipment will be depreciated using the Straight Line method.
Assuming a360-day yearfor your calculation,what is theAccrued Interest Expense on the Note on October31?
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