On June 30, 2014, Rolf Inc. borrowed $25,000 from its bank, signing an 8%, two-year note. Required
Question:
On June 30, 2014, Rolf Inc. borrowed $25,000 from its bank, signing an 8%, two-year note.
Required
1. Assuming that the bank charges simple interest on the note, prepare the journal entry Rolf will record on each of the following dates:
December 31, 2014
December 31, 2015
June 30, 2016
2. Assume instead that the bank charges 8% on the note, which is compounded semiannually. Prepare the necessary journal entries on the dates in part (1).
3. How much additional interest expense will Rolf have in part (2) than in part (1)?
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1 2 3 Interest recognized in b 1000 2000 1000 4000 Interest recognized in a 1000 2122 1125 4247 ...View the full answer
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Related Book For 
Financial Accounting The Impact on Decision Makers
ISBN: 978-1285182964
9th edition
Authors: Gary A. Porter, Curtis L. Norton
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