Question

10 Homework Show Me How Calculator Printem Entries toelastallment note transactions Chart of Accounts Journal Final Question On the of othecary Sher Company borrowed 6000 by giving a seven years installment note to Soros Hank The not requires annual payments of $15.995, with the first payment occur a year The first payment consists of rest of 53.840 and principal repayment of 12.155 on the last de om the entries to record the f a ctions Refer to the Chef Account for a wording of account

Answer 1

Solution Amount of notes payable $96,000 Rate of interest 4% Annual Payment $15,995 Interest portion in first payment $3,840 Principal portion in first payment $12,155 Required (a). Journalize the entries Accounting Equation Journal Post ref Description Debit Credit Liabilities Equity Date Assets 110- Cash 241 Notes Payable $96,000 $96,000 Jan. 1 $96,000 $96,000 ($3,840) 710 Interest Expense $3,840 Dec. 31 241 Notes Payable $12,155 ($12,155) 110 Cash $15,995 ($15,995) Required (b) Notes payable are reported as liabilities on the balance sheet. The portion of the note payable that is due within 12 months is reported as a Current Liabilities. The remaining portion of the note payable that is not due within that period is reported as a(n) Long- term Liabilities