To represent savings and investment, create a supply and demand diagram. This model aids in calculating the interest rate, which is the cost of a loan.
Interest rates and the amount of money in circulation are inversely related. A bigger money supply results in lower market interest rates, which reduces the cost of borrowing for consumers. In contrast, lower money supply tends to result in higher market interest rates, increasing the cost of borrowing for consumers.
Individuals and companies who save money (or make financial investments, which is the same thing) are on the supply side of the financial market. On the demand side of the financial market are those who borrow money.
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during industrialization, americans increasingly a. had less free time. b. became more inefficient. c. became less optimistic. d. fell into the ways of lockstep living. e. fragmented into diverse consumer markets.
Americans started increasingly falling into the ways of lockstep living during the industrialization period.
During the late nineteenth and twentieth century, America witnessed major changes in terms of behavior, migration, and living standard due to industrialization. People started moving towards cities in order to get employed and high standard of living. It also led to a change in the physical composition of the city. In light of industrialization, family size gradually declined after the Civil War and the emergence of the second industrial era.
Americans are living in lockstep ( unison and one rigid way lifestyle) with the increment of industry, and technology, markets people started living like a machine with everyone following one another in a row.
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a (fill in the blank) bond gives the issuer an option to retire the bond before maturity at a specific price after a specific date.
A bond gives the issuer an option to retire the bond before maturity at a specific price after a specific date. callable.
Maturity isn't a be counted as age, but instead, as the way you select to respond and react to numerous life situations. It is essentially a stage of intellectual improvement or information that has pertaining to all areas of a man or woman's life, proper from their conduct to their courting with others.
An emotionally mature person has reached (and continues to work at accomplishing) a stage of self-expertise close to their mind and behaviors after which comes to a decision on a way to great technique and deal with situations that might in any other cases be trying or tough.
Maturity influences a person's capability to certainly decide to date for life and remember the fact that commitment implies giving up all different associate picks. This, in flip, determines the level of consideration and dependability present in a dating.
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if mcdonald's and burger king raise prices too high, customers may switch from burgers to tacos. this illustrates porter's force of .
If McDonald's and burger king raise prices too high, customers may switch from burgers to tacos. this illustrates porter's force of Substitutes.
Porter's force:
Porter's forces or Porter's five force is method of analyzing the operating environment of a competition of a business. And it helps to derive five forces that determine the competitive intensity and, therefore, the attractiveness of an industry in terms of its profitability.
Given,
if McDonald's and burger king raise prices too high, customers may switch from burgers to tacos.
Here we need to find the porter's forces used.
While we looking into the given situation we have identified that the customers are switched over from burgers to tacos because the increase in the price of the product.
Therefore, it defies the porter's force of substitutes.
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On September 1, Concord purchased $40700 of inventory items on credit with the terms 1/15, net 30, FOB destination. Freight charges were $810. Payment for the purchase was made on September 18. Assuming Concord uses the perpetual inventory system and the net method of accounting for purchase discounts, what amount is recorded as the liability from this purchase?
The amount that is recorded as liability to purchase is $13167.
What is a liability?Financial accounting defines a liability as the forfeitures of future economic benefits that an entity must make to other entities as a result of prior transactions or other prior events, resolution of which may result in transfer or use of assets, provision of services, or other the future yielding of economic benefits. A bank records a liability on its balance sheet when a company deposits money with it. This liability indicates the bank's obligation to repay the depositor, usually on demand. Using the double-entry method, the bank simultaneously enters cash as an asset. When cash is deposited with the bank, the corporation, on the other hand, records a loss in cash and an equal gain in bank deposits.
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what is the depletion cost per ton if a newly discovered mineral deposit costs $3,800,000 to acquire, mining rights cost $825,000, and site preparation costs are $1,175,000? assume that the mine will yield 5,000,000 tons of ore and have no salvage value.
Assume that the mine will yield 5,000,000 tons of ore and have no salvage value.
Marine salvage is the method of improving a ship and its shipment after a shipwreck or other maritime casualty. Salvage may embody towing, re-floating a vessel, or effecting maintenance to a ship. Today, defending the coastal environment from spillage of oil or different contaminants is a high priority. Before the discovery of radio, salvage services would take delivery to a bothered vessel by any delivery that passed off to be passing via. In recent times, maximum salvage is done by means of expert salvage corporations with devoted crew and equipment. The felony significance of salvage is that a successful salvor is entitled to a reward, that is a percentage of the entire cost of the ship and its cargo.
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wickland company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $82,000. the machine's useful life is estimated to be 10 years, or 260,000 units of product, with a $8,000 salvage value. during its second year, the machine produces 20,800 units of product. determine the machines' second year depreciation under the units-of-production method.
The machines' units-of-production method second year depreciation is $14800.
Over time, an asset loses value due to use, damage from use, or obsolescence. This reduction is measured using depreciation. The depreciation, or loss in value, of an asset may also be influenced by other variables, such as bad market conditions. Subtract the asset's cost from its salvage value to determine the asset's straight-line depreciation. Depreciable basis is the total that can be written off as a result. The useful life of the item is reduced by this amount.
Depreciation Cost - Salvage Value / Useful Life = Straight Line Method
Wickland Corporation
Machine price: $820,000
Remainder worth of $8,000
10 years is the useful life.
Working:
$82000-$8,000/5 is the depreciation straight line method.
Straight Line Depreciation = 74000/5
Straight Line Method Depreciation = $14,800
Depreciation costs for the second year, calculated using the straight-line technique, would be: $14800
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Which best describes the flow of overhead costs in an activity-based costing system?.
The flow of overhead costs in an activity-based costing system is best described as overhead costs to activity costs pools to cost drivers to goods.
Overhead expenditures are ongoing business expenses that aren’t directly connected to rendering a good or service. It is essential for budgeting and for determining the prices that a company should set for its products or services in order to make a profit.Overhead is the aggregate term for costs that are incurred to sustain the business but are not directly related to a good or service.ABC is a method for dividing up direct and indirect expenditures into several categories of products and services, such as salary and utilities. The foundation of the ABC system of cost accounting is activities, which are characterised as any.A form of system of costing called “activity based”.Accounting costing where it is said that in which direct expenses are apportioned to products. Unlike the conventional techniques, this the connection between administrative expenses and overhead is clearly defined and connected.To the finished manufacturing item.
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when the government imposes a limit on sales of a good or service by a quota, it usually issues a license that gives the owner the right to sell a given quantity of the good. the market price of the license is equal to:
The government imposes a limit on sales of a good or service by a quota, it usually issues a license that gives the owner the right to sell a given quantity of the good. the market price of the license is equal to the demand price of the good.
When the authority's coverage is to adjust the amount of a great that may be offered and offered as opposed to the fee at which it's miles transacted, it makes use of a: quota. When fee controls take the shape of most costs set beneath the equilibrium fee, they are: fee ceilings.A fee ground this is set above the equilibrium fee creates a surplus. Figure 4.8 “Price Floors in Wheat Markets” indicates the marketplace for wheat. Suppose the authorities' units the fee of wheat at P F.
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restaurant akademay finds that there is sufficient demand for its products overseas. however, the restaurant doesn't have the resources to expand beyond the united states. which of the factors below prevent the company from targeting additional segments overseas?
The restaurant lacks the resources to grow beyond the United States. The factors listed under 'business aims and resources' preclude the corporation from targeting other overseas segments.
A restaurant is a business that prepares and serves food and beverages to consumers. Meals are typically served and consumed on the premises, however many restaurants also provide take-out and food delivery services. Restaurants vary widely in design and offerings, including a wide range of cuisines and service models ranging from low-cost fast-food meals and cafeterias to mid-priced family restaurants to high-priced luxury institutions.
The inn was another precursor of the restaurant. Inns were built along roads across the ancient world to provide lodging and food to those traveling between cities. Meals were usually served to guests at a communal table.
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which of the following events shifts the short-run aggregate-supply curve to the right? a. an increase in government spending on military equipment b. an increase in price expectations c. a drop in oil prices d. a decrease in the money supply e. none of the above
A drop in oil prices shifts the short-run aggregate-supply curve to the right. Due to drop of oil price this raised.
The spot price of a barrel (159 liters) of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Reference Basket, Tapis crude, Bonny Light, Urals oil, Isthmus, and Western Canadian Select. Oil prices are determined by global supply and demand, not by the volume of domestic production in any given country.
During the nineteenth and early twentieth centuries, the worldwide price of crude oil was largely stable. This changed in the 1970s, when the worldwide price of oil rose dramatically.
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When jason applied for a job as a heating and air conditioning technician, he was given a malfunctioning compressor and was asked to diagnose the problem. What type of selection tool does this represent?.
This is represented by the work sampling selection tool.
Work sampling tests require applicants to complete tasks or activities that are similar to those performed by employees on the job. Because work samples require applicants to perform tasks that are identical or very similar to tasks from the job, great care is taken to mimic the work environment as accurately as possible.
Work sample tests should only be used when applicants are expected to have the necessary competencies upon entry into the position. The work sample method may not be appropriate if training on how to perform the work activities will be provided after selection.
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consider the market for college textbooks. if the cost of tuition decreases, what will happen to equilibrium price and equilibrium quantity of college textbooks
The equilibrium price will drop with a drop in demand, and supply will increase less than demand.
What modifications do falling demand make to the equilibrium?A surplus results in a lower equilibrium price if demand declines but supply stays constant. It creates a surplus, which lowers the equilibrium price, if supply grows while demand stays the same. There is a shortage, which raises the equilibrium price, if supply declines and demand is constant.
When supply and demand both rise, what happens to equilibrium?The equilibrium price will rise due to an increase in demand while remaining constant in all other respects, increasing supply. The equilibrium price will drop with a drop in demand, and supply will increase less than demand.
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a flexible budget shows what budgeted amounts should have been at the actual level of activity. as a result of this change in activity, the flexible budget will show a change in total blank . multiple select question. fixed cost variable cost revenue
The flexible budget will show a change in total variable cost and revenue
The sum of what fixed expenses, variable costs, and revenues should have been at the actual level of activity will change as a result of flexible budgeting. In contrast to static budgeting, flexible budgeting allows for some room for leeway in the firm's budgets in response to output or sales within a specific time period.
This kind of budget is created after the conclusion of the accounting period. It is utilised for organisational management since it accounts for unforeseen events that might happen in a small or large scale environment. Flexible budgeting is thus employed as a control mechanism that considers costs as variables based on various established projections.
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in the simple quantity theory of money, the price level is assumed to be constant. group of answer choices true false
'in the simple quantity theory of money, the price level is assumed to be constant.
This statement is true.
In the money economy, the quantity theory of money is one of the directions of Western economic thought that emerged in the 16th and 17th centuries. The century has arrived. QTM states that the general price level of goods and services is directly proportional to the amount of money in circulation, or the money supply.
The Quantity Theory of Money is a framework for understanding price changes associated with the money supply in an economy. He argues that an increase in the money supply causes inflation and vice versa. The Irving Fisher model is most commonly used to apply theory.
In Friedman's modern quantity theory of money, money supply is independent of money demand. Monetary authority actions change the money supply, but money demand remains more or less stable.
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one way chip's coffee house retains staff is by offering two-weeks paid vacation and health insurance benefits for part-time employees. which of bossidy and charan's core processes is this business focusing on?
Chip's Coffee House retains staff by providing two weeks of paid vacation and health insurance benefits to part-time employees. This company focuses on the core processes.
Most individuals have insurance, whether it's for their car, their home, or even their life. But most of us don't give much thought to what insurance is or how it works. Simply put, insurance is a contract, represented by a policy, in which a policyholder receives financial protection or payment from an insurance company in the event of a loss. The company pools its clients' risks in order to make payments more cheap for the insured.
Insurance plans are intended to protect against the risk of financial losses, both large and minor, that may arise from harm to the insured or their property, or from liability for damage or injury caused to a third party.
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a. a government agency arranges to make loans to businesses whenever an economic downturn begins. this is an example of
Whenever a recession starts, a government agency sets up loans for businesses. An automated fiscal stabilizer like this one is an example.
Automatic stabilizers are parts of government budgets that, when the economy weakens, increase spending or decrease taxes without the consent of lawmakers.
Unemployment insurance, food stamps, and personal and corporate income taxes are examples of automatic stabilizers.
The tax and transfer systems have mechanisms known as automatic stabilizers that, without the direct involvement of policymakers, cool the economy when it overheats and stimulates it when it is in a slump. Without the direct involvement of policymakers, automatic stabilizers counteract fluctuations in economic activity.
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simpire produces one product p1. their cost of materials is $6.20 per unit and the cost for labor is $1.20 per unit. they have an overhead cost of $ 240,000. if simpire budgets to sell 30,000 units, what is the total budgeted cost for every unit?
The total budget for cost per unit is $ 15.4
How to calculate cost per unit?
Cost per unit is cost required to produce each unit of product. Cost per unit can be calculated by add up all costs divided by the number of units produced.
Since, we know the cost per unit for materials and labor, we simply divide the overhead cost by the number of units produced, and then we add up all the costs.
cost per unit = $ 6.20 + $ 1.20 + ($ 240,000 / 30,000 units)
= $ 6.20 + $ 1.20 + $ 8
= $ 15.40
Thus, the total budget for cost per unit is $ 15.4
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when capital income increases and everything else stays the same on the labor market group of answer choices labor supply decreases and the real wage increases. labor demand increases and the real wage increases. labor demand decreases and the real wage decreases. labor supply increases and the real wage decreases.
Effect of real wage growth on substitution, w. As w rises, more labour is done to raise income, and a worker performs work in its place.
What happens to the demand for labour as capital rises?
The labour demand curve changes out and right as the capital stock rises, and the production function shifts up. More workers are employed and output rises at a given real wage. The income effect explains why the labour supply curve bends backwards; beyond a particular wage rate, workers can afford to work fewer hours while still earning the same amount of money.
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When capital income increases and everything else stays the same on the labor market group --labor supply decreases and the real wage increase.
What is capital income?
Capital income is income that comes from capital, which is to say, comes from wealth itself, rather than any specific product or direct work. exemplifications are stock tips or any kind of capital earnings, as well as income an proprietor gets from a business he owns but not from the work he does there.
What's the function of capital income?The most important function of the capital is to promote the profitable growth of the country. For the satisfactory development of the country, acceptable finances are veritably essential.
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which of the following features make stretch targets feasible? a.the targets are set at desired levels for 20 years to ensure long-term performance. b.the measures are linked by causal relationships. c.the targets are set in isolation by top management. d.the measures are based on currently attainable standard costs.
Option "D"
Business strategy addresses the strategic choices made regarding the selection of a product, a competitive advantage, customer happiness, etc. Therefore, any option is appropriate.
3.) The learning and growth approach does not rely heavily on customer attributes.
Option 'B', 4.
Theoretical Annual Capacity / Available Production Hours equals units per hour.
= 9,000 / 3,000
= 3 hours per unit
Actual Cost Per Unit / 3 Units Per Hour is the ideal conversion cost per unit.
= $11 per unit (33/3).
What is Theoretical Annual Capacity ?
The quantity of throughput that could be achieved if a production facility was able to operate continuously at its highest efficiency level is known as theoretical capacity. Since theoretical capacity is so difficult to achieve in practise, it shouldn't be used for planning or bonus compensation.
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billy has chosen to purchase a new vehicle. the vehicle costs $15,000. his apr is 10% and he will be financing the vehicle for 36 months. how much will billy pay each month for his new vehicle?
Billy has chosen to purchase a new vehicle. the vehicle costs $15,000. his apr is 10% and he will be financing the vehicle for 36 months. S he has to pay each month for his new vehicle is $484.01.
Annuity = Annuity * [(1 - (1 / (1 + r)n)]/r
Sum of $15,000 equals Annuity * [0.25826029636 / 0]
150.00 = Annuity * 30.9912355755 Annuity = 150.00 / 30.9912355755 Annuity = 484.0000808061 or 484.000078
The process of raising money or capital for any kind of expenditure is referred to as financing.
financing is crucial to bolstering business finances because it enables organizations to take risks and develop.
A purchase is the act of receiving products or services in return for cash or another form of payment. Typically, cash or credit is used for payment. A purchase might also be made in exchange for taking on a liability or as part of a barter exchange involving the exchange of various non-cash assets.
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who initially collaborates with the project manager on the lessons learned document? everyone in the organization the stakeholders the project team members the project sponsor
The project manager and members of the project team first work together on the lessons-learned paper.
Who is in charge of the project management lessons that have been learned?Project managers typically lead review meetings and present lessons learned. Analyze, store, and retrieve are the three process groups that are involved. Analyze: After data on lessons learned has been gathered, analyze each lesson's root cause to determine what needs to be improved.
Why are project management lessons learned important?Creating a culture of knowledge sharing within an organization is primarily made possible by the project management lessons learned process. The use of prior knowledge to complete projects and advance organizational learning is encouraged by this process.
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flyer expects that 5% of accounts receivable is estimated to be uncollectible. what is the balance in the allowance for doubtful accounts after bad debt expense is recorded? group of answer choices $4,300.
$5,500 is the balance in the allowance for doubtful accounts after bad debt expense is recorded.
What are bad debts ?Bad debt, sometimes regarded as uncollectible accounts expense, is a sum of money owed to a creditor that is likely to go unpaid and for which the creditor is unwilling to take action to collect for a variety of reasons, frequently because the debtor lacks the funds to do so, for instance because a company is going bankrupt or into liquidation. Depending on accounting practices, legal considerations, and the institution's provisioning, there are many technical definitions of what a bad debt is. Bank debts in the USA that are more than 90 days past due are referred to as "problem loans."
Accounting sources indicate that as soon as a bad debt is anticipated, the entire amount should be written off to the profit and loss account or a provision for bad debts.
To solve the question :
Given,
Acc. Receivable: $110,000
Allowance for doubtful accounts = 5% of accounts receivable
The allowance for doubtful accounts balance equals 5% of accounts of accounts receivable
= 5% × $110,000.
= $5,500
Hence, $5,500 is the balance in the allowance for doubtful accounts after bad debt expense is recorded
The complete question is mentioned below :
Flyer Company:
- Cash Sales: $150,000
- Credit Sales: $450,000
- Selling and Administrative Exp: $110,000
- Sales returns and allowances: $30,000
- Gross Profit: $490,000
- Acc. Receivable: $110,000
- Sales Discount: $14,000
- Allowance for doubtful accounts: $1,200
Flyer estimates bad debt expense assuming that 5% of accounts receivable is estimated to be uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?
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which of these is not a risk strategy that is used specifically for dealing with opportunities? a. mitigate opportunity b. enhance opportunity c. exploit opportunity d. share opportunity
Mitigate opportunity is not a risk strategy that is used specifically for dealing with opportunities.
Risk strategy
Risk strategy means structured approach to addressing risks, and can be used in companies of all sizes and across any industry.
Given,
Here we need to identify which one is not a risk strategy that is used specifically for dealing with opportunities from the given options.
While we looking through the given options,
Enhance, exploits and share opportunity are risk strategies used in opportunities.
But the mitigate opportunity does not used in the risk strategy that is used specifically for dealing with opportunities.
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Thomas is the chief information officer at a food manufacturing company. The is used in the company are manufacturing oriented and provide little support to accounting. In this case, thomas will most likely report to the ________ of the company.
Thomas is the chief information officer at a food manufacturing company. The is used in the company are manufacturing-oriented and provide little support to accounting. In this case, Thomas will most likely report to the chief executive officer of the company.
A chief government officer (CEO), additionally referred to as an important executive officer (CEO), chief administrative officer (CAO), or simply chief government (CE), is one of the corporate executives charged with the management of an enterprise – specifically an independent felony entity together with an organization or nonprofit organization. CEOs discover roles in more than a few agencies, consisting of public and private organizations, non-earnings businesses, or even some authorities businesses (significantly nation-owned firms).
The CEO of a business enterprise or enterprise typically reviews the board of administrators and is charged with maximizing the value of the commercial enterprise, which might also include maximizing the percentage fee, market percentage, revenues, or every other detail. in the non-income and government zone, CEOs usually goal at attaining effects associated with the employer's assignment, generally furnished with the aid of regulation. CEOs also are often assigned the function of the major manager of the organization and the highest-rating officer within the C-suite.
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aurico is a company that offers ethics hotline maintenance and monitoring services for organizations. which component of the federal sentencing guidelines for organizations compliance program does this service help organizations to satisfy?
The component of federal sentencing guidelines for organization are Systems for monitoring, auditing, and reporting misconduct
What's association compliance?
In commercial and organizational operation, compliance is the procedure of making sure your association and workers follow practicable laws, regulations, norms, and ethical practices. In addition to succeeding inward programs, it also means being harmonious with state and civil laws. A compliance program is a set of inward programs and operations within a organisation to misbehave with laws, bylaws, and regulations or to justify the business' character.
Federal sentencing guidelines for organization :The FSGO apply to paunches, collaborations, labor mergers, pension finances, trusts,non-profit realities, and administrative units. The forfeits under the FSGO include forfeitures, exploration, public announcements of conviction, and reparation. The FSGO also hold provisions that can mainly alleviate forfeits.
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A retirement or abandonment of an asset is different from a sale of an asset because?.
A retirement or abandonment of an asset is different from a sale of an asset because a loss should be recognized for the remaining book value.
A durable asset is considered to have been disposed of when it is no longer in use. The carrying amount that was in effect when the asset was retired or abandoned is deducted from its value. The resulting loss is then deducted from the asset's carrying value. The difference between retiring or abandoning an asset and selling it is that no money is transferred.
The remaining book value necessitates the recording of a loss. An asset is considered retired when it is permanently taken out of service. Disposing of an asset due to obsolescence or a sale to a third party are two examples of asset retirement procedures.
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identify and explain how the intensification of trade brought prosperity and disruption to merchants and governments in the trading area.
In the trading region of the Indian Ocean, Aegean, Sahara, and overland Eurasia, the new global circulation of products and the increase of trade riches and upheaval to businesses and governments.
What is trading and how it is work?To put it simply, trading is the act of acquiring and transferring financial products with the intention of profiting from variations in their price movements, but without really being the owner of those instruments.
A job is trading?The entry hurdle to trading is often perceived as being high, yet if you're persistent and motivated, you can earn a living at it. Trading could result in a full-time career, a part-time one, or yet another source of income.
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suppose a firm has had the historical sales figures shown as follows. what would be the forecast for next year's sales using the average approach? year20172018201920202021 sales$ 500,000$ 750,000$ 700,000$ 750,000$ 775,000
The forecast for next year's sales, using the average approach, is $ 695, 000
How to find the forecast for sales?When using the average approach to forecast sales, the average sales figure of the sales from the previous years, are averaged, and the average will be the forecasted sales figure for the next year .
The average of the sales from 2017 to 2021 is:
= (500, 000 + 750, 000 + 700, 000 + 750, 000 + 775, 000 ) / 5 years
= 3, 475, 000 / 5
= $ 695, 000
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identify the following as primarily private or public sector characteristics. a) park user fees b) short-term projects c) profit d) tax-free bonds e) low-interest rate f) income tax g) water-quality standards
The following are labeled as by and large non-public or public area characteristics. a) park user fees - public b) short-time period projects - non-public c) profit - non-public d) tax-free bonds - public e) low-hobby rate - public f) profits tax - non-public g)water-first-class standards – public.
The non-public area is the section of the economic system inclusive of entities in search of to generate profit. Companies withinside the non-public area face notably little law from the nation and compete for consumers' money. Prices stabilize due to the truthful marketplace situations that stem from the competition. A non-public area corporation can start via the privatization of a public corporation or the status quo of a brand new business via way of means of non-public individuals. Shares of those corporations can be to be had on the non-public or public inventory markets on the discretion of the stakeholders. The public authority installation immense assembling limits, mainly withinside the middle region companies like power, steel, aluminum, copper, mining, huge equipment, paper, and so forth with the goal of creating India a assured economic system.
These had been likewise companies along with big speculation, lengthy boom intervals in challenge execution, and next substantial stretches of striking tight for buying income from ventures made. The non-public area is largely the other of the general public area, which operates under the manage of the authorities and regularly with taxpayers' funds. Common public area industries consist of education, fitness care, emergency services, military forces and regulatory agencies. The area pursuits to offer items that advantage all residents similarly in preference to creating a profit. While non-public and public corporations range greatly, they regularly shape partnerships to advantage the interests of each parties.
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problem1answered. problem2answered.this problem is current being displayed. problem3 question content areaon july 8, action co. issued a $79,000, 6%, 120-day note payable to scanlon co. assuming a 360-day year, what is the interest expense of the note?
As a result, it is very common for a company to borrow money early on, either from a thank or from a third party, to use for working capital and other business requirements.
It is essential for a business to record the interest expense associated with any borrowings when the company closes its books each month.
On July 8, Alton Company issued 120-day, 6%-interest-bearing $80,000 notes payable to Seller Company. Assume that Seller Company's fiscal year ends on July 31.
How is the interest expense on the note payable calculated?A long-term note payable's annual interest rate and principal balance should be determined. The annual interest expense is calculated by multiplying the balance by the interest rate. To determine the amount of interest to record in a monthly adjusting entry, divide the annual interest expense by 12.
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