15.
Rocky Company borrowed $10,000 on February 1, 20X1. The loan has an annual interest rate of 14%. Rocky Company repaid the loan in full (both principal and interest) on January 31, 20X2; no payments were made on the loan between February 1, 20X1 and January 31, 20X2. [Note: The correct adjusting entry with respect to this loan was recorded on December 31, 20X1.] The single journal entry to record the repayment of the loan (both principal and interest) on January 31, 20X2 includes a
Debit to Interest Expense for $1,283
Credit to Interest Expense for $1,283
Debit to Interest Expense for $1,167
Credit to Interest Expense for $1,167
Debit to Interest Expense for $1,400
Credit to Interest Expense for $1,400
Debit to Interest Payable for $1,283
Credit to Interest Payable for $1,283
16.
On June 1, 20X1, MaScare Company paid $3,600 for an insurance policy on some equipment that will be in effect for the 12 months from June 1, 20X1 through May 31, 20X2. MaScare recorded this payment on June 1 by debiting Insurance Expense. On September 1, 20X1, MaScare paid an additional $4,800 for an insurance policy on a building that will be in effect for the 12 months from September 1, 20X1 through August 31, 20X2. MaScare recorded this payment on September 1 by debiting Prepaid Insurance. On December 31, 20X1, MaScare makes one summary adjusting entry to make sure that the amount of Insurance Expense for 20X1 and the Prepaid Insurance amount as of December 31, 20X1 are both correct. The necessary summary adjusting entry includes a
Debit to Insurance Expense of $1,500
Debit to Insurance Expense of $100
Debit to Insurance Expense of $2,100
Debit to Insurance Expense of $1,600
17.
The following information is for Yosef Company:
20X2
20X1
Sales
$260,000
$320,000
Accounts Payable
10,000
20,000
Retained Earnings
125,000
78,000
Inventory
40,000
50,000
Accounts Receivable
25,000
20,000
Cost of Goods Sold
180,000
200,000
For 20X2, compute the average number of days that elapse from the time Yosef purchases
inventory until the time Yosef sells that inventory.
59.7 days
122.9 days
32.2 days
91.3 days
105.2 days
