E4-10 (Algo) Determining Financial Statement Effects of Interest on Two Notes LO4-1 Note 1: On April 1 of the current year, Warren Corporation received a $50,000, 5 percent no from a customer in settlement of a $50,000 open account receivable. According to the terms, the principal of the note and interest are payable at the end of 12 months. Warren's fiscal year ends on December 31. Note 2: On August 1 of the current year, to meet a cash shortage, Warren Corporation obtained a $50,000, 6 percent loan from a local bank. The principal of the note and interest expense are payable at the end of six months. Required: For the relevant transaction dates of each note, indicate the amounts and direction of effects on the elements of the statement of financial position and the statement of earnings. (Reminder: Assets = Liabilities + Shareholders' equity; Revenues - Expenses - Net earnings; and net earnings accounts are closed to retained earnings, a component of shareholders' equity.) (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.)

E4-10 (Algo) Determining Financial Statement Effects of Interest on Two Notes LO4-1 Note 1: On April 1 of the current year, Warren Corporation received a $50,000, 5 percent no from a customer in settlement of a $50,000 open account receivable. According to the terms, the principal of the note and interest are payable at the end of 12 months. Warren's fiscal year ends on December 31. Note 2: On August 1 of the current year, to meet a cash shortage, Warren Corporation obtained a $50,000, 6 percent loan from a local bank. The principal of the note and interest expense are payable at the end of six months. Required: For the relevant transaction dates of each note, indicate the amounts and direction of effects on the elements of the statement of financial position and the statement of earnings. (Reminder: Assets = Liabilities + Shareholders' equity; Revenues - Expenses - Net earnings; and net earnings accounts are closed to retained earnings, a component of shareholders' equity.) (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.)

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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Proceeds journal entry