Question

On October 31, 2018, Tucker Co. borrowed $16,000 on a one-year, 12 percent note payable. What amounts would Tucker Co. report for the note payable and the related interest payable on its balance sheet at January 31, 2019, and on its income statement for the year ended January 31, 2019? Start by selecting the accounts and entering the amounts relating to the note payable on the partial balance sheet. Tucker Co. Balance Sheet (partial) January 31, 2019 Assets Liabilities (Partial) Show the impact the note payable has on the partial income statement Tucker Co. Income Statement (partial) Year Ended January 31, 2019 Revenue: Expenses:

Answer 1

WORKING NOTES:
	CALCULATION OF INTEREST EXPENSES OF 12% NOTE AS ON 31/01/2019
	Value of note	$             16,000
	Interest Rate	12%
	Interest Amount of one year =	$                1,920
	Interest for 3 months = $ 1,920 X 3 / 12 month	$                   480
SOLUTION : 1
	BALANCE SHEET (PARTIAL)
	YEAR ENDED JANUARY 31 , 2019
	ASSETS	AMOUNT	LIABILITIES (PARTIAL)	AMOUNT
			Current Liabilities
			Short term note Payable	$            16,000
			Interest on note Payable	$                  480
			Total	$            16,480
SOLUTION : 2
	INCOME STATEMENT (PARTIAL)
	YEAR ENDED JANUARY 31 , 2019
	Revenue
	Expenses :
	Interest expenses	$                   480