1)Why is a bank more likely to offer you credit if you have a co-signer with good credit? 2)While examining cash receipts information, the accounting department determined the following information: opening cash balance = $150, cash on hand = $1

Business Feb 02, 2021

1)Why is a bank more likely to offer you credit if you have a co-signer with good credit?

2)While examining cash receipts information, the accounting department determined the following information: opening cash balance = $150, cash on hand = $1.125.74, and cash sales per register tape = $995.62. Prepare the required journal entry based upon the cash court sheet.

Expert Solution

1)Answer: Less Risk

Banks are more willing to offer you credit the higher your ability to payoff a loan is. By having a co-signer with good credit, the bank is more convinced that either you or your co-signer will pay back the loan. The co-signer is in effect reduces the risk of the loan in the banks eyes which typically makes it more likely you will get a loan and decreases the interest the bank charges you for it.

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