A business issued a 90-day, 9% note for $25,000 to a creditor on account. Illustrate the effects on the accounts and financial statements of recording (a) the issuance of thenote and (b) the payment of the note at maturity, including interest.If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflowsas negative amounts.a. Illustrate the effects on the accounts and financial statements of recording the issuance of the note.Statement of CashFlowsNo effectStatement of Cash FlowsStatement of CashAssetsNo effectFlowsAssetsCash= Accounts payable✓Balance SheetLiabilitiesLiabilitiesBalance SheetNotes payable✓ +Notes payableb. Illustrate the effects on the accounts and financial statements of recording the payment of the note at maturity, including interest. Assume a 360-day year. If required,round interest expense to the nearest whole number.+Stockholders' Equity✓Retained earnings++Stockholders' EquityNo effectNo effectIncomeStatementIncome StatementIncomeStatement

Lets understand the basics.Notes payable gets issued generally to obtain finance from outside or to…

count or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and tive amounts. trate the effects on the accounts and financial statements of recording the issuance of the note. ement of Cash Flows Assets ffect No effect Statement of Cash Flows Accounts payable Balance Sheet Liabilities Notes payable ✓ + + Stockholders' Equity No effect Income Statement Income Statement No effect

count or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and tive amounts. trate the effects on the accounts and financial statements of recording the issuance of the note. ement of Cash Flows Assets ffect No effect Statement of Cash Flows Accounts payable Balance Sheet Liabilities Notes payable ✓ + + Stockholders' Equity No effect Income Statement Income Statement No effect

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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