Module 5 ccc9 - Module 5 Allen Brown 10/30/10 CCC9-...

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Module 5 Allen Brown 10/30/10 CCC9- Includes DQ responses. (a) August 31 st Website: 1500 Cash: 1500 Simple journal entry that shows the upgrade performed to the website. (b) Monthly amortization 600/24=25 Accumulated amortization 9x25=25 This shows how much money is actually being paid to the debt and how much is going to the interest for the loan. (c) Revised Monthly Amortization Cost= 600 -Accumulated Amortization= (225) + Additional Cost= 1500 Amortizable Cost= 1875 Months remaining= 15 Revised Monthly Amortization= 125 This is a simple revision of the monthly amortization. By paying extra in a monthly payment you can knock of the principle and thus pay less interest.
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(d) Cost = 2100 Calculation For Accumulated Amortization 225 (from answer b) 4 months x 125= 500 Value= 1375 This is the accumulated amortization and book value on Dec 31. (e) The reason that the maintenance and insurance can be counted as expenses for the period is because they are operational cost for efficiency. The matching principle is used to show revenue
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Module 5 ccc9 - Module 5 Allen Brown 10/30/10 CCC9-...

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