A partial amortization schedule for a 10-year note payable that Mabry Company issued on January 1, Year 1, is shown as follows. Principal Balance Applied to Applied to Accounting Period Year 1 Year 2 Year 3 January 1 $200,000 184,826 168,742 Cash Payment Interest Principal $27,174 27,174 27,174 $12,000 $15,174 11,090 16,084 10,125 17,049 Required es a. What rate of interest is Mabry Company paying on the note? b. Using a financial statements model, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable. c. If the company earned $62,000 cash revenue and paid $45,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following? (1) Net income for Year 1. (2) Cash flow from operating activities for Year 1. (3) Cash flow from financing activities for Year 1. d. What is the amount of interest expense on this loan for Year 4? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What rate of interest is Mabry Company paying on the note? Rate of interest %

A partial amortization schedule for a 10-year note payable that Mabry Company issued on January 1, Year 1, is shown as follows. Principal Balance Applied to Applied to Accounting Period Year 1 Year 2 Year 3 January 1 $200,000 184,826 168,742 Cash Payment Interest Principal $27,174 27,174 27,174 $12,000 $15,174 11,090 16,084 10,125 17,049 Required es a. What rate of interest is Mabry Company paying on the note? b. Using a financial statements model, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable. c. If the company earned $62,000 cash revenue and paid $45,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following? (1) Net income for Year 1. (2) Cash flow from operating activities for Year 1. (3) Cash flow from financing activities for Year 1. d. What is the amount of interest expense on this loan for Year 4? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What rate of interest is Mabry Company paying on the note? Rate of interest %

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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