[The Following Information Applies to the Questions Displayed Below

question 102

Multiple Choice

[The following information applies to the questions displayed below.]
Omega Company adjusts its accounts at the end of each month.The following information has been assembled in order to prepare the required adjusting entries at December 31:
(1) A one-year bank loan of $720,000 at an annual interest rate of 12% had been obtained on December 1.
(2) The company pays all employees up-to-date each Friday.Since December 31 fell on Tuesday,there was a liability to employees at December 31 for two day's pay amounting to $6,800.
(3) On December 1,rent on the office building had been paid for four months.The monthly rent is $6,000.
(4) Depreciation of office equipment is based on an estimated useful life of six years.The balance in the Office Equipment account is $9,360;no change has occurred in the account during the year.
(5) Fees of $9,800 were earned during the month for clients who had paid in advance.
-What amount of interest expense has accrued on the bank loan?

• A)$6,400
• B)$7,000
• C)$7,200
• D)$7,800

Understand the role of government interventions in the market, such as taxes, price floors, and price ceilings.

Analyze how taxes affect market outcomes and the burden of tax on buyers and sellers.

Understand the concept of elasticity and how it affects the burden of taxation.

Evaluate the impact of rent control laws on the market.

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Definitions:

Temperature

It measures the substance's temperature by evaluating the average kinetic energy of its particles, illustrating if it's hot or cold.

Combustion

A high-temperature exothermic chemical reaction between a fuel and an oxidant, producing heat and usually light in the form of flame.

Chemical Equation

A symbolic representation of a chemical reaction, showing the reactants and products with their respective quantities.

Magnesium Oxide

A white hygroscopic solid mineral used as an antacid and mild laxative, and in numerous industrial applications.