1. Alpha Corporation hires a subject matter expert at a salary of Rs 5,000 per month including benefits. The subject matter expert is non-billable and is expected to help engineers with resolving their technical queries as well as assist them in development of new technology. The subject matter expert was hired on 1st of February and today is 1st of March of the same year. You have just paid him his salary. What accounts will this transaction impact? 1. Expense Account will be affected and Cash account will be affected.
|Salary (E) | 5,000 |
|Cash (A) |-5,000 |
2. Bravo Corporation borrows Rs 1,000,000 on 1st Jan 2013 from a bank for corporate expenses. As per the terms of the agreement, Bravo Corporation will need to pay the bank $1,728,000 at the end of three years. Today is 1st of Jan 2014 and Bravo Corporation is preparing its Income Statement. What will be the value of Interest Expense that figures in the Income Statement?
Compund INTEREST!!!!!!
1st JAN 2013
Balance sheet:
We did not do in 1st, as there was no income or Expense.
