The amount of money outflow from running sports that Jefferson might record in Year 1 and Year 2, respectively might be $0, and $360.
The required details for Cash Interest in given paragraph
1) Cash hobby paid yr 1 = 0
coins hobby paid yr 2 = 6000*6% = 360
So solution is b) $0, and $360.
2) Interest sales = 36000*5%*4/12 = six hundred
Cash hobby in running = 0
So solution is c) $six hundred hobby sales and 0 coins float from running sports.
Cash Interest means hobby rate of the Borrower and its Subsidiaries, to the quantity clearly paid in coins, at some point of the applicable period.
The key distinction among hobby rate and hobby profits is that hobby rate is the value of borrowing cash, whilst hobby profits is the cash you earn from investing. Interest rate is normally tax-deductible, whilst hobby profits is taxable.
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