073M1.1c

073M1.1c - Accounting Cycle: [073M1.1c] For each of the...

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[ 073M1.1c] For each of the independent scenarios below, prepare proper responses based upon the information given. Place your responses in the appropriate place in the answer book. All payments between the parties are made as scheduled. All firms have a fiscal year ending on December 31. Assume all months have 30 days. Note Payable: USC Company borrowed $420,000 from its bank on May 1, Year 1. USC agreed to pay $30,000 interest to the lender as interest each six months starting on November 1, Year 1. The first such payment covered the six months then ending. The principal [$420,000] and the final interest payment [$30,000] will both be paid to the lender on May 1, Yr. 4. Work Area: (place final answers in the answer book) Year 1 Interest Expense Year 2 Interest Expense Prepaid Interest at December 31, Year 1 [if none, so state on the answer sheet] Interest Payable at December 31, Year 2 [if none, so state on the answer sheet] Office Rent: Kate Company signed a lease on an office space on March 20, Year 1. The lease term is one year and starts on April 20, Year 1, the same day as Kate moved into the office. The lease agreement provided that Kate would have to pay rent for the entire twelve months on February 10, Year 2. The monthly rental amount for the office space was $14,100. On April 20, Year 2, Kate Company renewed this lease for another year and agreed to a monthly rate of $14,800 starting on April 20, Year 2. The new agreement requires rental payments occur each six months with the first payment on April 20, Year 2. The second semi-annual payment occurred as scheduled on October 20, Year 2. Work Area: (place final answers in the answer book) Office Rent Expense for the Year Ended December 31, Year 1 Prepaid Office Rent at December 31, Year 1 [if none, so state on the answer sheet] Rent Office Payable at December 31, Year 1 [if none, so state on the answer sheet] Office Rent Expense for the Year Ended December 31, Year 2 Prepaid Office Rent at December 31, Year 2 [if none, so state on the answer sheet] Office Rent Payable at December 31, Year 2 [if none, so state on the answer sheet] Question continues on next page. Accounting Cycle (continued): [ 073M1.1c] Salaries: On February 20, Year 1, Naydia hired nine employees at a monthly salary of $5,400 each. These employees started working for the firm on March 20, Year 1.
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This note was uploaded on 01/29/2009 for the course ACCT 250A taught by Professor Hopkins during the Fall '07 term at USC.

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073M1.1c - Accounting Cycle: [073M1.1c] For each of the...

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