The formula to calculate a customer's lifetime value is the person's total spending MINUS the cost to sustain the relationship
Explanation:
It's essential for any company to assess customer lifetime value to ensure success. Customers are a pivotal element influencing the growth of any business. They are central to buying goods and services produced by the business. Understanding how much it costs to acquire new customers compared to retaining existing ones is crucial.
By analyzing CLTV, a company can make informed decisions regarding marketing goals, cutting acquisition costs, and improving customer retention strategies.CLTV can be determined by taking the amount a customer spends and subtracting the total investment made to maintain that customer relationship.
Answer:Jalen journal $
Date
Jan 1,2021
Land Dr. 860,887
Note payable Cr. 860,887
Narration. Issuance of note for the above amount, payable in four installments for land purchase.
June 30,2021
Note payable Dr 215,221.64
Cash Cr. 215,221.64
Narration. Payment of the first installment for the land acquisition.
December 31,2021
Note payableDr 215,221.64
Cash.Cr. 215,221.64
Narration. Payment of the second installment for the land acquisition.
2. Remaining balance on note payable as of December 31, 2021 is $400,000
Interest expense balance is $30,443.28.
Explanation:
The land account is debited to reflect its purchase, while the notes payable account is credited to recognize the liability.
Payments made in the first and second periods debit the respective installment amounts.
The note payable balance indicates the outstanding principal payments of $800,000, whereas the interest expense denotes the additional amount beyond the principal.
