A Business Hired a Repairman to Overhaul Their Plumbing System

question 105

Essay

A business hired a repairman to overhaul their plumbing system. The repairman began work on September 15 and completed it on October 15. The business agreed to pay him $4,000 when the work was completed. As of September 30, the work was 50% complete and the business made an adjusting entry to accrue repair expense as of the end of September. On October 15, the work was completed and the business paid the repairman in full. Provide the journal entry for the cash payment on October 15.

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Definitions:

Required By Investors

Refers to the expectations or conditions that investors demand before committing capital to an investment.

Capital Structure

The combination of borrowing and ownership investments utilized by a company to finance its activities and expansion.

WACC

A method known as the Weighted Average Cost of Capital (WACC) is used to calculate a corporation's cost of capital, with every capital category assigned a proportional weight.

Historic Costs

The original monetary value of an asset or transaction, without accounting for inflation, depreciation, or appreciation, used as a basis for the financial accounting of assets.