After-tax cost of debt personal finance problem bella wans is interested in buying a new motorcycle. she has decided to borrow the money to pay the $20 comma 000 purchase price of the bike. she is in the 33% income tax bracket. she can either borrow the money at an interest rate of 4% from the motorcycle dealer, or she could take out a second mortgage on her home. that mortgage would come with an interest rate of 8%. interest payments on the mortgage would be tax deductible for bella, but interest payments on the loan from the motorcycle dealer could not be deducted on bella's federal tax return. a. calculate the after-tax cost of borrowing from the motorcycle dealership. b. calculate the after-tax cost of borrowing through a second mortgage on bella's home. c. which source of borrowing is less costly for bella? d. should bella consider any other factors when deciding which loan to take out?

If a bond is issued at a premium the effective interest rate is most likely

For each separate case below, follow the 3-step process for adjusting the prepaid asset account at december 31. step 1: determine what the current account balance equals. step 2: determine what the current account balance should equal. step 3: record the december 31 adjusting entry to get from step 1 to step 2. assume no other adjusting entries are made during the year. a. prepaid insurance. the prepaid insurance account has a $4,700 debit balance to start the year. a re- view of insurance policies and payments shows that $900 of unexpired insurance remains at year-end. b. prepaid insurance. the prepaid insurance account has a $5,890 debit balance at the start of the year. a review of insurance policies and payments shows $1,040 of insurance has expired by year-end. c.prepaidrent.onseptember1ofthecurrentyear,thecompanyprepaid$24,000 for 2 years of rentfor facilities being occupied that day. the company debited prepaid rent and credited cash for $24,000.

On january 15, the end of the first biweekly pay period of the year, north company’s payroll register showed that its employees earned $32,000 of sales salaries. withholdings from the employees’ salaries include fica social security taxes at the rate of 6.2%, fica medicare taxes at the rate of 1.45%, $3,000 of federal income taxes, $772 of medical insurance deductions, and $260 of union dues. no employee earned > $7,000 in this first period. prepare the journal entry to record north company’s january 15 (employee) payroll expenses and liabilities.