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Please explain this and show each step..

On August 1, 2014 Y borrowed $1,000,000 at 3%. Y pays interest every 6 months with interest payments every February 1 and August 1. Y will repay $400,000 of the principal on August 1, 2015 and the remainder on February 1, 2016. Assume Y only makes AJEs every December 31 AND does NOT make reversing entries. Prepare the entries Y should make on:

a) August 1, 2014

b) December 31, 2014

c) February 1, 2015

d) August 1, 2015

e) December 31, 2015

f) February 1, 2016

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Jamar Ferry
Jamar FerryLv2
28 Sep 2019

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Please explain well and show each step...

Prepare the AJEs that should be made on 09-30-13, the end of the accounting year, for each of the following situations. If no AJE is required, indicate “none.” Assume the firm only makes AJEs at the end of the accounting year.

a) On July 1, 2013, the firm collected $18,000 of rent for 12 months in advance. The journal entry to record the receipt included a credit to an income statement account.

b) On February 1, 2013, the company borrowed $120,000 at 4%. The principle is due on February 1, 2017. The interest is due every six months and the first interest payment took place on August 1, 2013.

c) On June 1, 2011, the company borrowed $2,500,000 for five years at 3%. Interest is due and payable every quarter and the first interest payment took place on September 1, 2011. The principle is payable in five equal installments and the first principle payment took place on June 1, 2012.

d) On February 1, 2013 the firm paid $1,600 for an 8-month equipment rental. The journal entry to record the payment included a debit to a real account.

PLEASE ANSWER STEP 2 ONLY

On September 30,2015, Dolphin Incorporated negotiated a 1,000,000 euro, two-yearloan from a German bank. The annual interest on the loan is 2%.Dolphin makes annual interest payments on September 30. Dolphinwill repay the loan principal on September 30, 2017. Dolphinprepares December 31 year-end financial statements in U.S.dollars.
Step 1:

Prepare the journal entries in Table 1 below for this foreigncurrency borrowing, based on the following exchange rates for oneeuro:

• September 30, 2015 . . . . . . . . . . . . . . .. $0.110
• December 31, 2015 . . . . . . . . . . . . . . .. $0.115
• September 30, 2016 . . . . . . . . . . . . . . .. $0.130
• December 31, 2016 . . . . . . . . . . . . . . .. $0.135
• September 30, 2017 . . . . . . . . . . . . . . .. $0.160

Step 2:
Determine theeffective cost (in U.S. dollars) of borrowing in 2015, 2016, and2017. Use Table 2 below as a worksheet.
Table 2: EffectiveCost of Borrowing
2015
2016
2017

Please explain well and show each step:

Prepare AJEs that should be made on 12-31-15, the end of the accounting year, for each of the following situations. If no AJE is required, indicate “none.” Assume the company only makes AJEs at the end of the accounting year. In addition, identify the impact, if any, on the financial statements if you failed to make the appropriate AJE. Indicate NE for no impact, U for understatement, and O for overstatement. Use the following format to indicate the impact of failing to make the required entry for each situation.

Assets Liabilities Expenses Revenues Net Income Owners’ Equity

XX XX XX XX XX XX

a) On July 1, 2015, the company rented a machine for 10 months and paid $5,000 in advance. The journal entry to record the payment included a debit to a permanent account.

b) On March 1, 2015, the company collected $1,800 of rent for 12 months in advance. The journal entry to record the receipt included a credit to a balance sheet account.

c) On September 1, 2015, the company collected $6,000 as rent for 6 months in advance. The journal entry to record the receipt included a credit to a temporary account.

d) On February 1, 2015, the company invested in a $100,000, 10-year bond that pays 3% interest every six months starting August 1, 2015.

e) On April 30, 2015, the company rented equipment for 10 months and paid $10,000 in advance. The journal entry to record the payment included a debit to a temporary account.

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