I don’t understand this Accounting question and need help to study.
I have three questions that need completed.
(1) No-Toxic-Toys currently has $200,000 of equity and is planning an $80,000 expansion to meet increasing demand of its product. The company currently earns $50,000 in net income, and the expansion will yield $25,00 in additional income before any interest expense. The company has three options: (1) do not expand, (2) expand and issue $80,000 in debt that requires payments of 8% annual interest or (3) expand and raise $80,000 from equity financing. For each option, compute (a) net income and (b) return on equity to 1 decimal place.
Don’t Expand Debit Financing Equity Financing
(2)Selected accounts from WooHoo Co’s adjusted trial balance
Notes payable (due in 5 years) $3,000 Discount on bonds payable $400
Accounts payable 500 Wages payable 200
Bond payable (due in 10 years) 10,000 Interest payable 100
Machinery 4,500 Sales tax payable 50
Prepare the liabilities section of its classified balance sheet. (Negative amounts indicated by a minus sign)
(3) On November 1, 2019, Norwood borrows $200,000 cash from a bank by signing a five year installment note. The note requires equal payments of $50,091 each year on October 31 bearing 8% interest.
Complete an amortization table for this installment note.
Prepare the journal entries in which Norwood records the following”
(a) Accrued interest as of December 31,2019 (the end of its annual reporting period)
(b) The first annual payment on the note.
I have attached a copy of these questions but some parts did not print which is why I have typed them out.
