Leach Company invested $80,000 in a certificate of deposit on June 1, 2013. The certificate had a 6 percent annual rate of interest and a one year term to maturity.
Required:
a. What amount of interest revenue will Leach recognize for the year ending December 31, 2013?
b. Show how the December 31, 2013, adjusting entry to recognize the accrued interest revenue affects the accounting equation.
c. What amount of cash will Leach collect for interest revenue in 2013?
d. What is the amount of interest receivable as of December 31, 2013?
e. What amount of cash will Leach collect for interest revenue in 2014, assuming it does not renew the CD?
f. What amount of interest revenue will Leach recognize in 2014, assuming it does not renew the CD?
g. What is the amount of interest receivable as of December 31, 2014, assuming it does not renew the CD?