Leach Company borrowed $95,000 cash by issuing a note payable on June 1, Year 1. The note had an 6 percent annual rate of interestand a one-year term to maturity.Required:a. What amount of interest expense will Leach recognize for the year ending December 31, Year 1?b. Record the issue of notes payable and recognition of interest on December 31, Year 1, in the accounting equation for Year 1.c. What amount of cash will Leach pay for interest expense in Year 1?d. What is the amount of interest payable as of December 31, Year 1?e. What amount of cash will Leach pay for interest expense in Year 2?f. What amount of interest expense will Leach recognize in Year 2?g. What is the amount of interest payable as of December 31, Year 2?-

The company can issue notes to borrow funds. The note can be issued either for the long term or the…

Answered: Leach Company borrowed $95,000 cash by…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dan Dayle started a business by issuing an $98,000 face value note to First State Bank on January 1, Year 1. The note had a 8 percent annual rate of interest and a five-year term. Payments of $24,545 are to be made each December 31 for five years. Required: a. What portion of the December 31, Year 1, payment is applied to interest expense and principal? b. What is the principal balance on January 1, Year 2? c. What portion of the December 31, Year 2, payment is applied to interest expense and principal? Note: Round your answers to the nearest dollar amount. a. Interest expense a. Principal b. Principal balance c. Interest expense c. Principal
On the first day of the fiscal year, Shiller Company borrowed $33,000 by giving a seven-year, 8% installment note to Soros Bank. The note requires annual payments of $6,404, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $2,640 and principal repayment of $3,764. Journalize the entries to record the following: a1. Issued the installment note for cash on the first day of the fiscal year. If an amount box does not require an entry, leave it blank. Cash fill in the blank 9d174cf85026fb7_2 fill in the blank 9d174cf85026fb7_3 Notes Payable fill in the blank 9d174cf85026fb7_5 fill in the blank 9d174cf85026fb7_6 a2. Paid the first annual payment on the note. If an amount box does not require an entry, leave it blank. Interest Expense fill in the blank 6e673f01702302e_2 fill in the blank 6e673f01702302e_3 Notes Payable fill in the blank 6e673f01702302e_5 fill in the blank…
Selkirk Company obtained a $16,000 note receivable from a customer on January 1, 2024. The note, along with interest at 12%, is due on July 1, 2024. On February 28, 2024, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 15%. Required: Prepare the journal entries required on February 28, 2024, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale.
On March 1, Felton Company borrows $90,000 from Ottawa State Bank by signing a 6-month, 8%, interest-bearing note. Instructions Prepare the necessary entries below associated with the note payable on the books of Felton Company. (a) Prepare the entry on March 1 when the note was issued. (b) Prepare the entry to record payment of the note at maturity. Essay Toolbar navigation B I U S E E = v A
Keesha Company borrows $115,000 cash on November 1 of the current year by signing a 180-day, 11%, $115,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 On what date does this note mature? (Assume that February has 28 days.) On what date does this note mature?
Abardeen Corporation borrowed $122,000 from the bank on October 1, Year 1. The note had an 6 percent annual rate of interest and matured on March 31, Year 2. Interest and principal were paid in cash on the maturity date. Required a. What amount of cash did Abardeen pay for interest in Year 1? b. What amount of interest expense was recognized on the Year 1 income statement? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) c. What amount of total liabilities was reported on the December 31, Year 1, balance sheet? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) d. What total amount of cash was paid to the bank on March 31, Year 2, for principal and interest? e. What amount of interest expense was reported on the Year 2 income statement? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) a. Amount of cash paid b. Interest expense c. Total liabilities d. Amount of cash…
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Abardeen Corporation borrowed $118,000 from the bank on October 1, Year 1. The note had an 6 percent annual rate of interest and matured on March 31, Year 2. Interest and principal were paid in cash on the maturity date. Required a. What amount of cash did Abardeen pay for interest in Year 1? b. What amount of interest expense was recognized on the Year 1 income statement? Note: Do not round intermediate calculations. Round your answer to the nearest dollar amount. c. What amount of total liabilities was reported on the December 31, Year 1, balance sheet? Note: Do not round intermediate calculations. Round your answer to the nearest dollar amount. d. What total amount of cash was paid to the bank on March 31, Year 2, for principal and interest? e. What amount of interest expense was reported on the Year 2 income statement? Note: Do not rbund intermediate calculations. Round your answer to the nearest dollar amount. a. Amount of cash paid b. Interest expense c. Total liabilities d.…
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