What is the right answers and why?? amaged existing rubber roof on a warehouse w
ID: 2512265 • Letter: W
Question
What is the right answers and why?? amaged existing rubber roof on a warehouse with a new advanced solar shingle roof would result in a debit to which account? Equipment (Asset) B. Repairs Expense C. Equipment Expense D. Gain from Repairs 11. Stev prom enson Company borrowed $98,000 from Bank of the Dakotas and issued a issory note. What journal entry should Stevenson Company record? DR CR ACCI 98,000 98,000 98,000 98,000 A. Cash Notes Receivable B. Notes Receivable 98,000 Cash C, Cash 98,000 Notés Payable 98,000 D. Notes Payable 98,000 Cash 12. On July 1, 2016, Marge Bakery Corp signed a $90,000, 5%, eight-month note payable with the amount borrowed plus accrued interest due eight months later on March 1, 2017. Marge Bakery should report interest payable at December 31, 2016 in the amount of: A. $4,500 B. $3,375 $2,250 D. $0
Explanation / Answer
Answer to question 10
Answer is Equipment (Assets) and reason for the same is that replacing the rubber roof with a new tecnologically advance roof is a deemed to be an investment and would require altogather will be a new assets whose benefits will be taken in coming years therefore Equipment(Assets) should be debited.
Answer to Question 11
Answer is
Cash A/c Dr $98.000
To Notes payable A/c $98,000
Reason is when Stevenson company borrowed a loan the entry was passed
Cash A/c Dr $98,000
To Loan from Bank of Dakotas A/c $98,000
When promission note was issued entry was
Loan from Bank of Dakotas A/c Dr $98,000
To Notes payable A/c $98,000
So laon from Bank of Dakotas goty cancelled and the final entry comes out to be
Cash A/c Dr
To Notes Payable
Answer to Question 12
Answer is $3,375
Since 5% is for 8 month (we need to keep in mind that the intreset is not p.a and its for 8 months)
5% of $90,000 for 8 month is 4500 and to report intrest payable for Dec 31 iy would be ($4,500/8*6)=$3,375
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