Question: You and several classmates are studying for the next accounting examination. They ask you to answer the following questions: 1. If cash is borrowed on

You and several classmates are studying for the next accounting examination.
They ask you to answer the following questions:
1. If cash is borrowed on a $70,000, 9-month, 12% note on August 1, how much interest expense would be incurred by December 31?
2. The cash register total including sales taxes is $42,000, and the sales tax rate is 5%. What is the sales taxes payable?
3. If $42,000 is collected in advance on November 1 for 6-month magazine subscriptions, what amount of subscription revenue is earned by December 31?

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