Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 9, Problem 1CP
1.
To determine
Calculate the interest expense that Incorporation FED should accrue as on December 31, 2018.
2.
To determine
Prepare the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Current portion of long-term debt
Connie's Bistro, Inc. reported the following information about its long-term debt in the notes to a recent financial statement
(in millions):
Long-term debt consists of the following:
Total long term-debt
Current portion
December 31 December 31
Current Year Preceding Year
$669,200
(194,100)
$475,100
$368,100
(180,700)
$187,400
Long-term debt
a. How much of the long-term debt was disclosed as a current liability on the current year's December 31 balance sheet?
million
b. How much did the total current liabilities change between the preceding year and the current year as a result of the
current portion of long-term debt?
million (
c. If Connie's Bistro did not issue additional long-term debt next year, what would be the total long-term debt on December
31 of the upcoming year?
million
Recording Accrued Interest Expense
Alaska Inc. borrowed $16,000 by signing a one-year note payable on November 1, 2020. The note bears interest at 10% and interest is payable upon maturity of the note.
a. Record this financing transaction on November 1, 2020.
b. Record the year-end adjusting entry required on December 31, 2020. Hint: Prorate the annual interest of 10% for two months.
c. Record the entry to repay the note on November 1, 2021.
Note: Round your answers to the nearest dollar. For example, enter 50 for 50.49 and enter 51 for 50.5
A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1, 2018, is shown as follows.
accounting period
principal balance
cash payment
app. to interest
app to principal
2018
136000
34965
12240
22725
2019
113275
34965
10195
24770
2020
88505
34965
7965
27000
what is the amount of interest expense on the loan?
Chapter 9 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 9.A - Calculate employee payroll (Learning Objective 8)...Ch. 9.A - Calculate net pay (Learning Objective 8) 5-10 min....Ch. 9.A - Employer payroll costs (Learning Objective 8) 5-10...Ch. 9.A - Prob. 4AECh. 9.A - Prob. 5AECh. 9.A - Prob. 6AECh. 9.A - Prob. 7BECh. 9.A - Prob. 8BECh. 9.A - Calculating gross and net pay (Learning Objective...Ch. 9.A - Calculating gross and net pay (Learning Objective...
Ch. 9.A - Calculating gross and net pay (Learning Objective...Ch. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - What is the distinguishing feature of the...Ch. 9 - Prob. 6DQCh. 9 - Will interest expense be more than, less than, or...Ch. 9 - Prob. 8DQCh. 9 - What are the differences between an operating...Ch. 9 - Prob. 10DQCh. 9 - Known liabilities of uncertain amounts should be...Ch. 9 - Prob. 2SCCh. 9 - Prob. 3SCCh. 9 - Prob. 4SCCh. 9 - Which term is used to describe an unsecured bond?...Ch. 9 - Prob. 6SCCh. 9 - Plavix Corporations bonds payable carry a stated...Ch. 9 - Prob. 8SCCh. 9 - Martin s bonds pay interest semiannually on July 1...Ch. 9 - Prob. 10SCCh. 9 - Prob. 11SCCh. 9 - Prob. 12SCCh. 9 - Prob. 1SECh. 9 - Prob. 2SECh. 9 - Prob. 3SECh. 9 - Prob. 4SECh. 9 - Prob. 5SECh. 9 - Prob. 6SECh. 9 - Bond terms (Learning Objective 5) 5-10 min. Match...Ch. 9 - Determining the issue price for bonds (Learning...Ch. 9 - Prob. 9SECh. 9 - Prob. 10SECh. 9 - Accounting for bonds (Learning Objective 5) 15-20...Ch. 9 - Prob. 12SECh. 9 - Prob. 13SECh. 9 - Prob. 14SECh. 9 - Prob. 15SECh. 9 - Prob. 16AECh. 9 - Accounting for notes payable (Learning Objective...Ch. 9 - Prob. 18AECh. 9 - Prob. 19AECh. 9 - Prob. 20AECh. 9 - Prob. 21AECh. 9 - Prob. 22AECh. 9 - Prob. 23AECh. 9 - Classifying notes payable as current or long-term...Ch. 9 - Disclosing liabilities on a balance sheet...Ch. 9 - Prob. 26AECh. 9 - Prob. 27BECh. 9 - Prob. 28BECh. 9 - Prob. 29BECh. 9 - Prob. 30BECh. 9 - Prob. 31BECh. 9 - Prob. 32BECh. 9 - Prob. 33BECh. 9 - Prob. 34BECh. 9 - Classifying notes payable as current or long-term...Ch. 9 - Prob. 36BECh. 9 - Prob. 37BECh. 9 - Prob. 38APCh. 9 - Prob. 39APCh. 9 - Prob. 40APCh. 9 - Prob. 41APCh. 9 - Prob. 42APCh. 9 - Prob. 43APCh. 9 - Prob. 44APCh. 9 - Prob. 45BPCh. 9 - Prob. 46BPCh. 9 - Prob. 47BPCh. 9 - Prob. 48BPCh. 9 - Prob. 49BPCh. 9 - Prob. 50BPCh. 9 - Prob. 51BPCh. 9 - Prob. 1CECh. 9 - Prob. 1CPCh. 9 - Prob. 1CFSAPCh. 9 - Prob. 1EIACh. 9 - Case 2. Sherry Talbot, the CEO of Talbot...Ch. 9 - Prob. 1FACh. 9 - Prob. 1IACh. 9 - Small-Business Analysis Purpose: To help you...Ch. 9 - Prob. 1WC
Knowledge Booster
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.Similar questions
- Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $55,000, four-year, 11% installment note from Campbell Bank. The note requires annual payments of $17,728, beginning on December 31, Year 1. Question Content Area a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Note: Enter all amounts to the nearest whole dollar. Round Year 4 Interest Expense (up or down) to ensure the carrying amount is zero at the end of the note term. Amortization of Installment Notes Year EndingDecember 31 January 1Carrying Amount Note Payment(Cash Paid) Interest Expense(7% of January 1Note CarryingAmount) Decrease inNotes Payable December 31Carrying Amount Year 1 $fill in the blank b149b9fd0071019_1 $fill in the blank b149b9fd0071019_2 $fill in the blank b149b9fd0071019_3 $fill in the blank b149b9fd0071019_4 $fill in the blank b149b9fd0071019_5 Year 2 fill in the blank b149b9fd0071019_6…arrow_forwardAccounts Payable Salaries Payable Accumulated Depreciation, Equipment Estimated Warranty Liability Mortgage Payable Notes Payable, 6 months $107,000 148,000 35,000 30,000 287,000 33,000 Required: Prepare the current liability section of Creative's balance sheet. $47,000 in principal is due during 2024 regarding the mortgage payable.arrow_forwardEntries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $52,000, four-year, 11% installment note from Campbell Bank. The note requires annual payments of $16,761, beginning on December 31, Year 1. a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. In Year 4, round the amount in the Decrease in Notes Payable column either up or down to ensure that the Carrying Amount zeroes out.arrow_forward
- A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1, 2018, is shown as follows. accounting period principal balance cash payment app. to interest app to principal 2018 136000 34965 12240 22725 2019 113275 34965 10195 24770 2020 88505 34965 7965 27000 what is the amount of interest expense on the loan for 2021? *forgot to add what year it was asking for in the previous problem*arrow_forwardChapter 11 Homework (Application) Current Portion of Long-Term Debt Connie's Bistro, Inc., reported the following information about its long-term debt in the notes to a recent financial statement: Long-term debt is comprised of the following: December 31 Current Preceding Year Year Total long term-debt $486,300 $267,500 Less current portion (141,000) (131,300) Long-term debt $345,300 $136,200 a. How much of the long-term debt was disclosed as a current liability on the current year's December 31 balance sheet? b. How much did the total current liabilities change between the preceding year and the current year as a result of the current portion of long-term debt? X Increase v c. If Connie's Bistro did not issue additional long-term debt next year, what would be the total long-term debt on December 31 of the upcoming year?arrow_forwardCurrent portion of long-term debt Connie's Bistro, Inc. reported the following information about its long-term debt in the notes to a recent financial statement (in millions): Long-term debt consists of the following: Total long term-debt Current portion December 31 Current Year C. $685,100 (198,700) $486,400 million December 31 Prior Year Long-term debt a. How much of the long-term debt was disclosed as a current liability on the current year's December 31 balance sheet? $ $376,800 (185,000) $191,800 b. How much did the total current liabilities change between the preceding year and the current year as a result of the current portion of long-term debt? million If Connie's Bistro did not issue additional long-term debt next year, what would be the total long-term debt on December 31 of the upcoming year? millionarrow_forward
- On November 1, 2018, A-1 Products borrowed $64,000 on a 5%, 5-year note with annual installment payments of $12,800 plus interest due on November 1 of each succeeding year. On November 1, 2020, what is the balance of the Long-Term Notes Payable account? (Round your answer to nearest whole number.) OA. $38,400 OB. $64,000 OC. $12,800 O D. $51,200arrow_forwardRequired information [The following information applies to the questions displayed below.] 1/1 1/1 12/31 12/31 On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $76,500 face value, four-year term note that had an 8 percent annual interest rate The note is to be repaid by making annual cash payments of $23,097 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $35,955 cash per year. b. Organize the information in accounts under an accounting equation. Note: Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Account Titles for Retained Earnings, leave the cell blank. Not all cells will require entry. Event Year 1 Balance Year 2 Beginning balance BROWN COMPANY Effect of Events on the Accounting Equation Year 1, Year 2, Year 3 and Year 4 Liabilities Notes Payable…arrow_forward1 Saved Help Save & Ex On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Cash Effective Increase in Outstanding Payment Payment Interest Balance Balance 6,544,432 6,555,654 6,567,437 6,579,809 6,592,799 6,606,439 6,620,761 1 316, 0ее 316,000 316,000 316,000 316, е0е 316,000 327,222 327,783 328,372 328,990 329,640 330,322 11,222 11,783 12,372 12,990 13,640 14,322 3. 4 6 38 316,000 316,000 316,000 384,243 387,655 391,243 68,243 71,655 75,243 7,753,102 7,824,757 7,900,000 39 40 Required: 1. What is the face amount of the bonds? 2. What is the initial selling price of the bonds? 3. What is the term to maturity in years? 4. Interest is determined by what approach? 5. What is the stated annual interest rate? 6. What is the effective annual interest rate? 7. What is the total cash interest paid over the term to maturity? 8. What is the total effective…arrow_forward
- Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $32,000, four-year, 11% installment note from Campbell Bank. The note requires annual payments of $10,314, beginning on December 31, Year 1. a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Note: Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. In Year 4, round the amount in the Decrease in Notes Payable column either up or down to ensure that the Carrying Amount zeroes out. Amortization of Installment Notes Year Interest Expense Ending (11% of January 1 December 31 January 1 Note Payment Decrease in December Note Carrying Carrying Carrying Amount (Cash Paid) Notes Payable 31 Amount) Amount Year 1 2$ $ Year 2 Year 3 Year 4 b. Journalize the entries for the issuance of the note and the four annual note payments. IIarrow_forwardThe following amortization schedule indicates the interest and principal that Chip’s Cookie Corporation (CCC) must repay on an installment note established January 1, 2021. CCC has a December 31 year-end and makes the required annual payments on December 31. Year Beginning Notes Payable Interest Expense Repaid Principal on Notes Payable Ending Notes Payable 1 39,000 2,730 8,784 30,216 2 30,216 2,115 9,399 20,817 3 20,817 1,457 10,057 10,760 4 10,760 753 10,760 0 Total 7,055 39,000 Use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of interest expense to report in the year ended December 31, 2021 (Year 1); (c) the note payable balance at January 1, 2024; and (d) the total interest and total principal paid over the note’s entire life. (Round your answers to the nearest whole dollar amount.)arrow_forwardA partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1, 2018, is shown as follows. accounting period principal balance cash payment app. to interest app to principal 2018 136000 34965 12240 22725 2019 113275 34965 10195 24770 2020 88505 34965 7965 27000 what is the rate of interest being paid in percentage?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY