Solution-How much of the cash paid

How much of the cash paid

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Question - Listed below are three scenarios related to KAC's outstanding borrowings. Prepare all journal entries necessary to record interest expense recognized during 20Y1 and 20Y2. Use the timelines to help you as illustrated in the example. Round to the nearest dollar.

A. On March 1, 20Y2 KAC Inc. issued $500,000 of 9% bonds. They mature in 10 years, with interest payable semiannually.

How much of the cash paid in 20Y2 relates to 20Y2 interest expense?

What is the total 20Y2 impact on the accounting equation? Indicate the impact by entering "I" for Increase, "D" for Decrease and "NE" for No Effect.

B. On May 31, 20Y1 KAC Inc. borrowed $300,000 by issuing a 4-year, 6% promissory note. Interest is payable annually.

How much of the cash paid in 20Y2 relates to 20Y2 interest expense?

What is the total 20Y2 impact on the accounting equation? Indicate the impact by entering "I" for Increase, "D" for Decrease and "NE" for No Effect.

Reference no: EM132732196

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How much of the cash paid

Reference no: EM132732196

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