At the end of each year, you plan to deposit $3,400 in a savings account. The ac
ID: 2565640 • Letter: A
Question
At the end of each year, you plan to deposit $3,400 in a savings account. The account will earn 6% annual interest, which will be added to the fund balance at year-end. The first deposit will be made at the end of Year 1. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)
Required:
1. Prepare the required journal entry at the end of Year 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. What will be the balance in the savings account at the end of the 10th year (i.e., after 10 deposits)? (Round your answer to nearest whole dollar.)
3. What is the interest earned on the 10 deposits? (Round your answer to nearest whole dollar.)
4. How much interest revenue did the fund earn in the second year? In the third year? (Do not round intermediate calculations. Round your answers to nearest whole dollar.)
5. Prepare the all required journal entries at the end of the second and third years. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar.)
Explanation / Answer
1 )
INVESTMENT A/C DR $ 3400
TO BANK / CASH A/C $ 3400
2 )
YEAR
OPERNING BALANCE ($)
INVESTMENT ($)
INTERSET ACCRUED($)
CLOSING BALANCE ($)
1
0
3400
0
3400
2
3400
3400
204
7004
3
7004
3400
420
10824
4
10824
3400
650
14874
5
14874
3400
893
19167
6
19167
3400
1150
23717
7
23717
3400
1423
28540
8
28540
3400
1712
33652
9
33652
3400
2019
39071
10
39071
3400
2345
44816
TOTAL
34000
10816
44816
BALANCE AT 10 TH YEAR = $ 44816
3 ) INTEREST EARNED ON DEPOSIT = $ 10816
4 )
INTEREST EARNED ON SECOND YEAR = 204 $
INTEREST EARNED ON SECOND YEAR = 420 $
5 ) 2 nd YEAR
INVESTMENT FUND A/C DR $ 3400
TO BANK A/C $ 3400
INVESTMENT FUND A/C DR $ 204
TO INTERSE RECEIVED A/C $ 204
INTEREST RECEIVED A/C DR $ 204
TO PROFT AND LOSS A/C $ 204
3 rd YEAR
INVESTMENT FUND A/C DR $ 3400
TO BANK A/C $ 3400
INVESTMENT FUND A/C DR $ 420
TO INTEREST RECEIVED A/C $ 420
INTEREST RECEIVED A/C DR $ 420
TO PROFIT AND LOSS A/C $ 420
YEAR
OPERNING BALANCE ($)
INVESTMENT ($)
INTERSET ACCRUED($)
CLOSING BALANCE ($)
1
0
3400
0
3400
2
3400
3400
204
7004
3
7004
3400
420
10824
4
10824
3400
650
14874
5
14874
3400
893
19167
6
19167
3400
1150
23717
7
23717
3400
1423
28540
8
28540
3400
1712
33652
9
33652
3400
2019
39071
10
39071
3400
2345
44816
TOTAL
34000
10816
44816
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