Ask Question
BusinessBusiness
7 September, 10:45

On October 1, Bramble's Carpet Service borrows $362000 from First District Bank on a 3-month, $362000, 6% note. What entry must Bramble's Carpet Service make on December 31 before financial statements are prepared?

+3
Answers (1)
  1. 7 September, 12:07
    0
    Dr Interest expense - $21,720

    Cr interest Payable - $21,720

    Explanation:

    Interest

    Since it is a short-time loan (3-month), the interest rate will be prorated to 3-month.

    Interest expense = $362,000 *.06 * 3/12 = $21,720

    Hence, following entries will be recorded:

    Dr Interest expense - $21,720

    Cr interest Payable - $21,720

    For Principal amount Borrowed:

    Cr Loan payable $362000

    Dr. Bank Account $362000

    Upon Settlement:

    Dr. Interest Payable $21,720 and Cr Bank Account $21,720

    Dr. Loan payable $362000 and Cr Bank Account $362000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On October 1, Bramble's Carpet Service borrows $362000 from First District Bank on a 3-month, $362000, 6% note. What entry must Bramble's ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Which department is responsible for initiating the purchase of materials?
Answers (1)
From the perspective of manufacturers, standardization means: A. making identical, interchangeable components or complete products. B. making the exact product a particular customer needs or wants. C.
Answers (1)
Entries for Note Collected by Bank Accompanying a bank statement for Santee Company is a credit memo for $15,120 representing the principal ($14,000) and interest ($1,120) on a note that had been collected by the bank.
Answers (1)
For the current year, Packers Company decided to switch from the indirect method to the direct method for reporting cash flows from operating activities on the statement of cash flows.
Answers (1)
Which of the following is an example of countercyclical monetary policy posing a danger of overreaction? Select all that apply: Loose monetary policy seeking to end a recession goes too far and triggers inflation.
Answers (1)
New Questions in Business
Willey Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic bottles.
Answers (1)
In a process cost system, the amount of work in process inventory is valued by a. allocating departmental costs between completed and partially completed units b. finding the sum of all completed jobs c.
Answers (1)
Measures of central tendency and variability are calculated to describe the nature of charitable giving each year. These figures are computed for the "average" American citizen. Which of these is a possible value for the variance in dollars given? A.
Answers (1)
How do you get a business at the age of 13
Answers (2)
Use the following data to compute total factory overhead costs for the month: Sales commissions $ 12,200 Direct labor 41,000 Indirect materials 16,600 Factory manager salaries 8,600 Factory supplies 10,400 Indirect labor 7,700 Depreciation-office
Answers (1)
Home » Business » On October 1, Bramble's Carpet Service borrows $362000 from First District Bank on a 3-month, $362000, 6% note. What entry must Bramble's Carpet Service make on December 31 before financial statements are prepared?
Sign Up Forgot Password?