On July 1, 2009, Allen Company signed a $100,000,one-year, 6 percent note payable. At due date, June 30, 2010,the principal and interest will be paid. Interest expenseshould be reported on the income statement (for the year endedDecember 31, 2009) as ? b) On January 1, 2009, Houston Company purchased a deliverytruck that cost $40,000. Cash of $10,000 was paid, and thebalance of $30,000 was payable on January 31, 2010. The truckhas an estimated useful life of four years and no residualvalue. Considering only these facts, depreciation expense (onthe truck) for 2009, would be? c) Pella Company purchased a machine that cost $50,000 and hadan estimated useful life of 10 years (no residual value) on January1, 2006. The book value at the end of 2007,would be? d) Assume Idaho Company recorded the followingadjusting entry at year-end:
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Insurance expense
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$2,000
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Prepaid insurance
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$2,000
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If the beginning balance in prepaid insurance was $500 and$2,500 was paid for an insurance premium during the year, the ending balance in the prepaid insurance account (after the aboveadjusting entry) would be?