Question

In: Economics

On January 1, Portillo, Inc. lends a corporate customer $156,000 at 5% interest. The amount of...

On January 1, Portillo, Inc. lends a corporate customer $156,000 at 5% interest. The amount of interest revenue that should be recorded for the quarter ending March 31 equals:

Multiple Choice

  • $7,800.

  • $650.

  • $2,600.

  • $1,950.

Solutions

Expert Solution

Answer- Correct option is 'D'

Annual interest rate = 156,000 * 5 %

                            = 7800

Monthly interest rate = Annual interest rate / 12

                                =   7800 / 12

                                =    650

Quaterly interest rate = Monthly interest rate * 3

                                 =   650 * 3

                                 = 1950

The amount of interest revenue that should be recorded for the quarter ending March 31 equals $ 1950.

Rahul Sunny answered 8 months ago
Next > < Previous

Related Solutions

1. On January 1 2010, J Company lends M Company $20,000 with payment due in 5...
1. On January 1 2010, J Company lends M Company $20,000 with payment due in 5 years. J Company calculates that present value of the $20,000 is $13,612. Required: a) Prepare the journal entry for J Company on January 1, 2010. b) Prepare an effective interest amortization table with 4 columns for J Company. c) Prepare the journal entries for J Company on 31 December 2010, 2011, 2012, 2013, 2014 and 2015. Assume that M Companies repays J Company promptly....
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of equipment. Before the...
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of equipment. Before the equipment could be used, Harlow had to spend $6,000 to put the equipment in working order. The equipment was assigned a useful life of 12 years and a salvage value of $9,000. The straight-line method will be used to record depreciation on the equipment. On January 1, 2025, Harlow Company decided the life of the equipment should be revised from 12 to 15 years...
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of equipment. Before the...
On January 1, 2018, Harlow Company paid $156,000 to purchase a piece of equipment. Before the equipment could be used, Harlow had to spend $6,000 to put the equipment in working order. The equipment was assigned a useful life of 12 years and a salvage value of $9,000. The straight-line method will be used to record depreciation on the equipment. On January 1, 2025, Harlow Company decided the life of the equipment should be revised from 12 to 15 years...
Date of Note Face Amount Interest Rate Term of Note a. January 5 * $94,000 8%...
Date of Note Face Amount Interest Rate Term of Note a. January 5 * $94,000 8% 120 days b. February 15 * 24,000 7 30 days c. May 19 64,000 8 60 days d. August 20 34,200 4 75 days e. October 19 49,000 5 75 days * Assume a leap year in which February has 29 days. Assume 360 days in a year when computing the interest. Round your answers to the nearest dollar. Note Due Date Interest a....
1. A bond issued on January 1, 2018 with a face amount of ​$5,000 at 5%...
1. A bond issued on January 1, 2018 with a face amount of ​$5,000 at 5% has a current price quote of 100. Interest is payable on 7/1 and 1/1. The market rate is 5%. This is a 2 year bond. What is the amount of the discount or premium? Enter a number value. 2.A bond issued on January 1, 2018 with a face amount of ​$8,000 at 5% has a current price quote of 103. Interest is payable on...
On January 1, 2019, Dealership Inc. sold and delivered a car to a customer for $30,000...
On January 1, 2019, Dealership Inc. sold and delivered a car to a customer for $30,000 cash. The car included a basic standard one-year (assurance) warranty for major parts and a five-year extended warranty (commences January 1, 2019) for all parts and labour. Two performance obligations are identified: car and standard warranty; and the extended warranty. The car could have been sold separately for $28,000 and the extended warranty for $4,000. The estimated cost for the standard warranty is $350...
On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate...
On January 1, 2019, Drennen Inc. issued $5 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2028. a. Calculate the proceeds (issue price) of Drennen Inc.'s bonds on January 1, 2019, assuming that the bonds were sold to provide a market rate of return to the investor. (Round PV factor to 4 decimal places.) b-1. Assume instead...
Cascade Company was started on January 1, 2018, when it acquired $156,000 cash from the owners....
Cascade Company was started on January 1, 2018, when it acquired $156,000 cash from the owners. During 2018, the company earned cash revenues of $80,300 and incurred cash expenses of $67,500. The company also paid cash distributions of $5,500. Required Prepare a 2018 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows under each of the following assumptions. (Consider each assumption separately.) Cascade is a sole proprietorship owned by Carl Cascade. A) Prepare...
On January 1, Manderlee Inc. issued $180,000 of 9% 5-year bonds when the market interest rate...
On January 1, Manderlee Inc. issued $180,000 of 9% 5-year bonds when the market interest rate was 10%. The bonds pay interest semiannually on June 30th and December 31. Proceeds received were $173,050. These bonds were issued at a DISCOUNT/PREMIUM (circle one) because the Contract Rate is EQUAL TO/ GREATER THAN/ LESS THAN (circle one) the Market Rate Record the following transactions: Bond issue on January 1 Paid semiannual interest on June 30 Amortized the bond premium or discount
On January 1, Montgomery Inc. issued $200,000 of 12% 5-year bonds when the market interest rate...
On January 1, Montgomery Inc. issued $200,000 of 12% 5-year bonds when the market interest rate was 10%. The bonds pay interest semiannually on June 30th and December 31. Proceeds received were $215,443. These bonds were issued at a DISCOUNT/PREMIUM (circle one) because the Contract Rate is EQUAL TO/ GREATER THAN/ LESS THAN (circle one) the Market Rate Record the following transactions: Bond issue on January 1 Paid semiannual interest on June 30 Amortized the bond premium or discount
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT