The ledger of Flounder Corp. on March 31 of the current year includes the following selected accounts before quarterly adjusting entries have been prepared:

		Debit		Credit
Prepaid Insurance		$3,060
Supplies		2,930
Equipment		25,950
FV-OCI Investments		162,000
Accumulated Depreciation—Equipment				$7,440
Notes Payable				26,200
Unearned Rent Revenue				9,400
Rent Revenue				59,300
Interest Expense		-0-
Salaries and Wages Expense		14,700

An analysis of the accounts shows the following:

1.		The equipment depreciation is $310 per month.
2.		One half of the unearned rent was earned during the quarter.
3.		Interest of $393 has accrued on the notes payable.
4.		Supplies on hand total $905.
5.		Insurance expires at the rate of $255 per month.
6.		The FV-OCI Investments were purchased for $162,000 on March 1. No investments were purchased or sold after that date. The fair value on March 31 was $182,000.

1) Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

2) If the notes payable have been outstanding since January 1 of the current year, what is the annual interest rate on the notes payable? (Round answer to 2 decimal places, e.g. 15.25%.)

Answer rating: 100% (QA)

Answer to Question 1 SerialNo Account Title and Explanation Debit Credit 1 Depreciation 3103 930 To ... View the full answer