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Question: A $30 000, 8%, 9-month note payable requires a (total) interest payment of $1, 800 over the life …
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Question: A $30 000, 8%, 9-month note payable requires a (total) interest payment of $1, 800 over the life ...

Show transcribed image text A $30 000, 8%, 9-month note payable requires a (total) interest payment of $1, 800 over the life of the note. The contractual (stated) interest rate is always equal to the market interest rate on the date that bonds are issued. Cash dividends are not a liability of the corporation until they are declared by the board of directors. Stock can be issued only in exchange for cash. In accordance with the cost principle, brokerage fees should be added to the cost of an investment (stocks or bonds). When recording bond interest, Interest Receivable is reported as a fixed asset in the balance sheet.

A $30 000, 8%, 9-month note payable requires a (total) interest payment of $1, 800 over the life of the note. The contractual (stated) interest rate is always equal to the market interest rate on the date that bonds are issued. Cash dividends are not a liability of the corporation until they are declared by the board of directors. Stock can be issued only in exchange for cash. In accordance with the cost principle, brokerage fees should be added to the cost of an investment (stocks or bonds). When recording bond interest, Interest Receivable is reported as a fixed asset in the balance sheet.

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