Question 1 Journalizing Installment Notes On the first day of the fiscal year, a company...
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Accounting
Question 1
Journalizing Installment Notes
On the first day of the fiscal year, a company issues $58,000, 10%, six-year installment notes that have annual payments of $13,317. The first note payment consists of $5,800 of interest and $7,517 of principal repayment.
a. Journalize the entry to record the issuance of the installment notes.
b. Journalize the first annual note payment. For a compound transaction, if an amount box does not require an entry, leave it blank.
Question 2:
Times interest earned
Berry Company reported the following on the company's income statement in two recent years:
| Current Year | Prior Year | |||
| Interest expense | $341,000 | $409,200 | ||
| Income before income tax expense | 4,160,200 | 4,828,560 | ||
a. Determine the number of times interest charges were earned for current Year and prior Year. Round to one decimal place.
| Current Year | |
| Prior Year |
b. Is the number of times interest charges are earned improving or declining?
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