70.2K

Verified Solution

Link Copied!

Question 1:

Sheridan Corporation operates on a calendar year basis. The company is in its first year of operations and received its annual property tax bill on March 31 for $21800. The bill is due May 1. Even though the company records adjusting entries on a monthly basis, no entries related to property taxes have been recorded. The March 31 entry to record property tax should be:

a) debits to prepaid property tax and property tax expense for $16350 and $5450, respectively, and credit to property tax payable for $21800.

b) debit property tax expense $21800 and credit property tax payable $21800.

c) debit property tax expense $5450 and credit property tax payable $5450.

d) debits to prepaid property tax and property tax expense for $16350 and $5450, respectively, and credits to property tax payable and cash for $16350 and $5450, respectively.

Question 2:

On January 1 of this year, Crane Lenders agrees to lend Windsor Corp. $154000. Windsor Corp. signs a $154000, 6%, 9-month loan. Interest is due at maturity. What entry will Windsor Corp. make to repay the loan on September 30, assuming no further adjusting entries have been made since June 30?

a)

Interest Payable	4620
Bank Loan Payable	154000
Interest Expense	2310
Cash			160930

b)

Bank Loan Payable	154000
Interest Payable	6930
Cash			160930

c)

Interest Expense	3850
Bank Loan Payable	154000
Cash			157850

d)

Bank Loan Payable	160930
Cash			160930

Question 3:

On March 2, Bramble Inc. obtained a loan for $132000 for 5 years at 6%. Payments are $2552 per month. How much interest expense is recorded with the first installment payment?

a) $2552

b) $3960

c) $7920

d) $660

Answer & Explanation Solved by verified expert

See Answer