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Sagot :
The Omit entry for payment of interest is 1. Cash 20,000,000
Bonds Payable 20,000,000
2. Interest Expense 600,000
Cash 600,000
3. Bonds Payable 20,000,000
Loss on redemption on bond 400,000
Cash 20,400,000.
What is the reason of payment of interest?
- For a number of crucial reasons, lenders require borrowers to pay interest.
- First, when someone lends money, they are no longer able to utilize that money to pay for their own goods.
- This difficulty is offset by the payment of interest. Second, a borrower can stop paying back the debt.
- What do interest payments serve as?
- Lenders may charge interest for the use of their money, or borrowers may charge interest for the use of those funds.
- Simple interest (based on the principle amount) or compound interest are two common definitions of interest (based on principal and previously-earned interest).
- Interest is the cost of borrowing money or the fee you charge to lend it. Most frequently, interest is shown as a yearly percentage of the loan amount.
To more learn about payment of interest refer to:
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