Questions -
Q1) A company purchased a delivery van for $27,700 with a salvage value of $3,100 on September 1, Year 1. It has an estimated useful life of 6 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?
$4,617.
$1,539.
$4,100.
$1,367.
$1,025.
Q2) On March 17, Grady Company agrees to accept a 60-day, 9%, $7,200 note from Alert Company to extend the due date on an overdue account. What is the journal entry needed to record the payment of the note by Alert Company on the maturity date?
Debit Notes Payable $7,200; credit Interest Expense $108, credit Cash $7,092.
Debit Notes Payable $7,200; debit Interest Expense $162; credit Cash $7,362.
Debit Notes Payable $7,200; debit Interest Expense $108; credit Cash $7,308.
Debit Cash $7,308; credit Interest Revenue $108; credit Notes Receivable $7,200.
Debit Cash $7,308; credit Interest Revenue $108; credit Notes Payable $7,200.