Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The ledger of Flounder Corp. on March 31 of the current year includes the following selected accounts before quarterly adjusting entries have been prepared: Debit

The ledger of Flounder Corp. on March 31 of the current year includes the following selected accounts before quarterly adjusting entries have been prepared:

Debit Credit

Prepaid Insurance

$3,060

Supplies

2,930

Equipment

25,950

FV-OCI Investments

162,000

Accumulated DepreciationEquipment

$7,440

Notes Payable

26,200

Unearned Rent Revenue

9,400

Rent Revenue

59,300

Interest Expense

-0-

Salaries and Wages Expense

14,700

An analysis of the accounts shows the following:

1. The equipment depreciation is $310 per month.
2. One half of the unearned rent was earned during the quarter.
3. Interest of $393 has accrued on the notes payable.
4. Supplies on hand total $905.
5. Insurance expires at the rate of $255 per month.
6. The FV-OCI Investments were purchased for $162,000 on March 1. No investments were purchased or sold after that date. The fair value on March 31 was $182,000.

1) Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

2) If the notes payable have been outstanding since January 1 of the current year, what is the annual interest rate on the notes payable? (Round answer to 2 decimal places, e.g. 15.25%.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Disruption In The Audit Market

Authors: Krish Bhaskar, John Flower

1st Edition

0367220660, 978-0367220662

More Books

Students also viewed these Accounting questions

Question

Do you think physicians should have unions? Why or why not?

Answered: 1 week ago