Accounting Period Year 1 Principal balance January 1 Applied to Applied to Cash Payment Interest $410,000 $ 52,500 $ 16,400 Required: a. What is the annual rate of interest charged on this loan? b. Using the horizontal 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. Complete this question by entering your answers in the tabs below. Required A Required B Using the horizontal 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. Event Number Note: In the Statement of Cash Flows column, use OA to designate operating activity, IA for investment activity, and FA for financing activity. Enter any decreases to acco and cash outflows with a minus sign. Leave cells blank if no input is needed. 1. 2 Assets Cash 410,000 2 Total "NC-Net change in cash Principal $36,100 410,000- Balance Sheet Liabilities Installment Note 410,000+ 410,000+ Stockholders' Equity Retained Earnings Common Stock 01 Revenue Income Statement Expenses Net Income 0 Statement of Cash Flows 410.000 410,000 FA FA OA NC
Accounting Period Year 1 Principal balance January 1 Applied to Applied to Cash Payment Interest $410,000 $ 52,500 $ 16,400 Required: a. What is the annual rate of interest charged on this loan? b. Using the horizontal 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. Complete this question by entering your answers in the tabs below. Required A Required B Using the horizontal 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. Event Number Note: In the Statement of Cash Flows column, use OA to designate operating activity, IA for investment activity, and FA for financing activity. Enter any decreases to acco and cash outflows with a minus sign. Leave cells blank if no input is needed. 1. 2 Assets Cash 410,000 2 Total "NC-Net change in cash Principal $36,100 410,000- Balance Sheet Liabilities Installment Note 410,000+ 410,000+ Stockholders' Equity Retained Earnings Common Stock 01 Revenue Income Statement Expenses Net Income 0 Statement of Cash Flows 410.000 410,000 FA FA OA NC
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Accounting
Period
Year 1
Principal
balance
January 1
Applied to Applied to
Cash
Payment
Interest
$410,000 $ 52,500 $ 16,400
Required:
a. What is the annual rate of interest charged on this loan?
b. Using the horizontal 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.
Complete this question by entering your answers in the tabs below.
Required A Required B
Using the horizontal 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.
Event
Number
Note: In the Statement of Cash Flows column, use OA to designate operating activity, IA for investment activity, and FA for financing activity. Enter any decreases to acco
and cash outflows with a minus sign. Leave cells blank if no input is needed.
1.
2
Assets
Cash
410,000
2
Total
"NC-Net change in cash
Principal
$36,100
410,000-
Balance Sheet
Liabilities
Installment
Note
410,000+
410,000+
Stockholders' Equity
Retained
Earnings
Common
Stock
01
Revenue
Income Statement
Expenses Net Income
0
Statement of
Cash Flows
410.000
410,000
FA
FA
OA
NC
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