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What is cash coverage ratio?
The cash coverage ratio is useful for determining the amount of cash available to pay for interest, and is expressed as a ratio of the cash available to the amount of interest to be paid.To calculate the cash coverage ratio, take the earnings before interest and taxes (EBIT) from the income statement, add back to it all non-cash expenses included in EBIT (such as depreciation and amortization), and divide by the interest expense. The formula is: Earnings Before Interest and Taxes + Non-Cash Expenses Interest Expense.
Does interest expense increase or decrease cash flow?
It decreases cash, since it is something that you are paying out, not receiving.
What is the journal entry to record interest expense and bond premium?
debit interest expensedebit bond premiumcredit cash
What is Cash flow to Fixed-Charge Ratio?
cash generate from normal course of business that able to cover the fixed charge such as lease and interest expense
Is interest paid the same as interest expense?
Interest paid and interest expense are closely related but not identical concepts. Interest paid refers to the actual cash outflow for interest on debt during a specific period, while interest expense is the accounting recognition of that interest cost on the income statement, which may include accrued interest not yet paid. In many cases, they can be the same, but differences can arise due to timing and accounting practices.
Where the interest expense in cash flow statement?
Interest expense can be shown in cash flow from operating activities as well as cash flow from financing activities as well.
What is cash coverage ratio?
The cash coverage ratio is useful for determining the amount of cash available to pay for interest, and is expressed as a ratio of the cash available to the amount of interest to be paid.To calculate the cash coverage ratio, take the earnings before interest and taxes (EBIT) from the income statement, add back to it all non-cash expenses included in EBIT (such as depreciation and amortization), and divide by the interest expense. The formula is: Earnings Before Interest and Taxes + Non-Cash Expenses Interest Expense.
Does interest expense increase or decrease cash flow?
It decreases cash, since it is something that you are paying out, not receiving.
What is the journal entry to record interest expense and bond premium?
debit interest expensedebit bond premiumcredit cash
Accounting treatment of trade discount and cash discount?
Trade Discount are considered cost of sales/reduction in sales dependant upon who the customer is. Cash Discount is always considered Increasing Interest Expense/Reduction of Interest Expense, dependant upon who the recipient is.
Is depreciation expenses a non-cash expense?
is depreciation expense a non-cash expense
What is Cash flow to Fixed-Charge Ratio?
cash generate from normal course of business that able to cover the fixed charge such as lease and interest expense
How do you record loan using cash basis accounting?
When the money for the loan is received it is recorded as cash. Payments are not recorded until the actual payments are sent out. This will be recorded as a debit to a loan expense account and credited directly to cash. The interest is debited directly to an interest expense account and credited directly to cash for the same payment. A compound entry can be used for this purpose. There is no loan payable or interest payable accounts for cash basis accounting.
Micro Fish Company recognized 10000 of interest expense in 2007 The balance of the company's interest payable account decreased 2000 The amount of cash paid by the company for interest in 2007?
Company has paid 2000 cash for interest due to which interest payable reduced by 2000.
Is interest paid the same as interest expense?
Interest paid and interest expense are closely related but not identical concepts. Interest paid refers to the actual cash outflow for interest on debt during a specific period, while interest expense is the accounting recognition of that interest cost on the income statement, which may include accrued interest not yet paid. In many cases, they can be the same, but differences can arise due to timing and accounting practices.
What is the journal entry to record payment of accrued interest?
[Debit] Interest expense xxxx [Credit] Interest payable xxxx [Debit] Interest payable xxxx [Credit] Cash / bank xxxx
Which of Notes Payable Cash Interest Expense and Dividends are decreased with a debit?
Notes Payable - I hope that wasn't for an exam.
