On December 31, 2013, Post Company decided to invest a sufficient amount of cash to pay the
Question:
Required (show computations and round to the nearest dollar):
1. How much cash must be deposited each December 31?
2. What amount of interest will be earned on the four deposits until December 31, 2016?
3. How much interest revenue will the fund earn each year?
4. Prepare journal entries for the company to record the following transactions:
a. The first deposit on December 31, 2013.
b. The deposit at December 31, 2014, and interest revenue for 2014.
c. The payment of the debt on December 31, 2016.
5. Show how the effect of the fund will be reported on the income statement for 2014 and the statement of financial position at December 31, 2014.
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Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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