Explain how you would compute the imputed interest on cash borrowed at 0% interest when the market rate of interest is 8%.
What will be an ideal response?
Imputed interest on a 0% interest loan is a two-step process. First, compute the present value of the loan repayments by using an appropriate market rate of interest, 8% in this situation. Second, compare the loan amount to the lower present value computed in step one; the difference is the amount of imputed interest to be recognized over the term of the loan.
You might also like to view...
A reconciliation from Enterprise funds statements to government-wide statements is not necessary because:
A. they both use the same measurement focus and basis of accounting (current financial resources, modified accrual). B. they use a different measurement focus and basis of accounting. C. enterprise funds are not included in the government-wide statements. D. they both use the same measurement focus and basis of accounting (economic resources, accrual).
A salesperson contacts eight potential customers per day. From past experience, we know that the probability of a potential customer making a purchase is .10. a.What is the probability that the salesperson will make at least exactly two sales in a day?b.What is the probability that the salesperson will make at least two sales in a day?c.What percentage of days will the salesperson not make a sale?d.What is the expected number of sales per day?
What will be an ideal response?
Which of the following is the best description of intellectual property?
A) physical property, such as land and housing B) anything that a person thinks C) property that is the result of mental creativity D) property that is considered to be very fruitful
A chart of accounts is a detailed record of the changes in a particular asset, liability, or equity account during a specified period
Indicate whether the statement is true or false