Principles of Accounting I
Quiz 11
#17
The journal entry used to record the issuance of a discounted note for the purpose of borrowing funds for the business is
a. debit Notes Payable; credit Cash
b. debit Accounts Payable; credit Notes Payable
c. debit Cash and Interest Payable; credit Notes Payable
d. debit Cash and Interest Expense; credit Notes Payable
#24
During its first year of operations, a company granted its employees vacation privileges and pension rights estimated at a cost of $24,178 and $15,400, respectively. The vacations are expected to be taken in the next year, and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year?
a. $15,400
b. $39,578
c. $24,178
d. $70,378
I missed both of these on a quiz. What is the correct answer and solution. Thank you
17 | ||||||||||||||||
The journal entry used to record the issuance of a discounted note for the purpose of borrowing funds for the business is Debit Cash and Interest Expense; credit Notes Payable | ||||||||||||||||
Option D is correct | ||||||||||||||||
24 | ||||||||||||||||
Under the accrual basis, cost of vacation pay and pension rights are to be recognized in the year in which they accrue | ||||||||||||||||
Total cost of vacation pay and pension rights to be recognized in the first year = 24178+15400= $39578 | ||||||||||||||||
Option B is correct | ||||||||||||||||
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