EQUIRED: (a) Compute the interest payable at June 30, 2022. (b) Prepare the liabilities section of the December 31, 2022 classified statement of financial position for Jaemin Corporation, include notes as appropriate
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
The accountant for Jaemin Corporation prepared the following schedule of liabilities as of December 31,
2022.
Accounts payable and accrued expenses 1,650,000
Notes payable — trade 1,200,000
Notes Payable — bank 8,000,000
Wages and salaries payable 350,000
Interest payable ?
10% mortgage note payable 6,000,000
12% mortgage note payable 4,500,000
Bonds payable 10,000,000
The following additional information pertains to these liabilities:
a. The bank notes payable include two separate notes payable to Minhyung Bank:
(1) A P2,000,000, 8% note issued March 1, 2022, payable on demand. Interest is payable each
six months. Jaemin already made the first semi-annual interest payment on August 31, 2022.
(2) A 2-year, P6,000,000, 11 % note issued January 2, 2021. On December 30, 2022, after
paying the accrued interest, Jaemin negotiated a written agreement with the Minhyung Bank
to replace this note with a 2-year, P6,000,000, 10% note. The new note was issued January
2, 2023.
b. The 10% mortgage note was issued November 1, 2017, with a term of 10 years. The terms of the
note give the holder the right to demand immediate payment if the company fails to make a
quarterly interest payment within 10 days of the date the payment is due. As of December 31,
2022, is two months behind in paying its required interest payment. Penalty for non-payment of
interest charged by the bank was P120,000.
c. The 12% mortgage note was issued May 1, 2013, with a term of 20 years. Interest is due annually
on April 30.
d. d. The bonds payable are 10-year, 8% bonds, issued June 30, 2013. Interest is payable annually
every June 30.
REQUIRED:
(a) Compute the interest payable at June 30, 2022.
(b) Prepare the liabilities section of the December 31, 2022 classified statement of financial position for
Jaemin Corporation, include notes as appropriate
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