Question 1 Journalizing Installment Notes On the first day of the fiscal year, a company...
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Accounting
Question 1
Journalizing Installment Notes
On the first day of the fiscal year, a company issues $58,000, 10%, six-year installment notes that have annual payments of $13,317. The first note payment consists of $5,800 of interest and $7,517 of principal repayment.
a. Journalize the entry to record the issuance of the installment notes.
b. Journalize the first annual note payment. For a compound transaction, if an amount box does not require an entry, leave it blank.
Question 2:
Times interest earned
Berry Company reported the following on the company's income statement in two recent years:
Current Year
Prior Year
Interest expense
$341,000
$409,200
Income before income tax expense
4,160,200
4,828,560
a. Determine the number of times interest charges were earned for current Year and prior Year. Round to one decimal place.
Current Year
Prior Year
b. Is the number of times interest charges are earned improving or declining?
Answer & Explanation
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