Matt's Machine Company has borrowed $10 million for four months at 5.5% APR, using inventory stored in a field warehouse as collateral. The warehouse fee is 0.5%, payable at the end of the loan. What is Matt's EAR?

Morrison Corporation borrowed $45,000 from Commercial Bank on June 1 of the current year. The bank required 9% interest. Interest will be paid every three months until the 9-month note is paid. What is the total Interest Expense and the Interest Payable at December 31 of the current year?

A) Interest Expense $2,362.50; Interest Payable $2362.50 B) Interest Expense $337.50; Interest Payable $337.50 C) Interest Expense $2,362.50; Interest Payable $337.50 D) Interest Expense $3,037.50; Interest Payable $2362.50

On January 1, Year 1 Alcorn Corporation purchased $95,000 of 9% bonds at face value. The bonds are classified as a held-to-maturity investment. The bonds pay interest semiannually on January 1 and July 1. On December 31, Year 1, the fair value of the bonds is $98,000

Required: 1. Prepare the journal entries to record the acquisition of the bonds and the first two interest payments. Include any year-end adjusting entries. 2. If the bonds were classified as an available for sale security, what additional adjusting entry would be made on December 31? What will be an ideal response?