Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $66,600 (face amount), one-year note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is an interest-bearing note? $ b. Provide the following entries and reporting amounts: 1. August 1 of Year 1, date of the loan. 2. December 31 of Year 1, adjusting entry. 3. July 31 of Year 2, payment of the note • Note: Round your answers to the nearest whole dollar. Account Name Date 1. Aug. 1, Year 1 2. Dec. 31, Year 1 3. July 31, Year 2 To record issue of note. Show Transcribed Text Current liabilities Note Payable To record year-end adjusting entry. To record payment of note. Balance Sheet, Dec. 31 c. What liability amounts should be shown on the December 31 of Year 1 Show Transcribed Text C. Current liabilities C C ➜ $ Balance Sheet, Dec. 31 Year 1 + S Year 1 Dr. Cr. Noninterest-Bearing Note d. Answer (a) and (c) assuming that the note is noninterest-bearing. Use the straight-line method to amortize any discount on note payable. a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note? $ c. What liability amounts should be shown on the December 31 of Year 1 balance sheet? ce sheet?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

1.Please Complete  Solution  With Details 
2.Final Answer Clearly Mentioned 
3.Do not give solution  in image format

 

Recording Entries for Interest-Bearing and Noninterest-Bearing Notes
Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $66,600 (face amount), one-year
note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume
an effective interest rate of 11%.
Interest-Bearing Note
a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming
the note is an interest-bearing note?
$
b. Provide the following entries and reporting amounts:
1. August 1 of Year 1, date of the loan.
2. December 31 of Year 1, adjusting entry.
3. July 31 of Year 2, payment of the note
• Note: Round your ans
Date
1. Aug. 1, Year 1
2. Dec. 31, Year 1
3. July 31, Year 2
Current liabilities
Note Payable
To record issue of note.
Show Transcribed Text
to the nearest whole dollar.
Account Name
To record year-end adjusting entry.
Balance Sheet, Dec. 31
To record payment of note.
3
c. What liability amounts should be shown on the December 31 of Year 1 balance sheet?
Show Transcribed Text
c. Current liabilities
→ $
Balance Sheet, Dec. 31 Year 1
÷ $
Dr.
Year 1
Noninterest-Bearing Note
d. Answer (a) and (c) assuming that the note is noninterest-bearing. Use the straight-line method to
amortize any discount on note pay
Cr.
a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming
the note is a noninterest-bearing note?
$
c. What liability amounts should be shown on the December 31 of Year 1 balance sheet?
Transcribed Image Text:Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $66,600 (face amount), one-year note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is an interest-bearing note? $ b. Provide the following entries and reporting amounts: 1. August 1 of Year 1, date of the loan. 2. December 31 of Year 1, adjusting entry. 3. July 31 of Year 2, payment of the note • Note: Round your ans Date 1. Aug. 1, Year 1 2. Dec. 31, Year 1 3. July 31, Year 2 Current liabilities Note Payable To record issue of note. Show Transcribed Text to the nearest whole dollar. Account Name To record year-end adjusting entry. Balance Sheet, Dec. 31 To record payment of note. 3 c. What liability amounts should be shown on the December 31 of Year 1 balance sheet? Show Transcribed Text c. Current liabilities → $ Balance Sheet, Dec. 31 Year 1 ÷ $ Dr. Year 1 Noninterest-Bearing Note d. Answer (a) and (c) assuming that the note is noninterest-bearing. Use the straight-line method to amortize any discount on note pay Cr. a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note? $ c. What liability amounts should be shown on the December 31 of Year 1 balance sheet?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Accounting for Long-term liabilities
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education