Florenda Quino Forwarders borrowed P600,000 from the bank on Sept. 1, 2019. The note carried an 8% annual rate of interest and was set to mature on Feb. 29, 2020. Interest and principal were paid in cash on the maturity date.
Florenda Quino Forwarders borrowed P600,000 from the bank on Sept. 1, 2019. The note carried an 8% annual rate of interest and was set to mature on Feb. 29, 2020. Interest and principal were paid in cash on the maturity date.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Florenda Quino Forwarders borrowed P600,000 from the bank on Sept. 1, 2019. The note carried an 8% annual rate of interest and was set to mature on Feb. 29, 2020.
Interest and principal were paid in cash on the maturity date.
Required:
1. What was the amount of interest expense paid in cash in 2019?
2. What was the amount of interest expense recognized on the 2019 income statement?
3. What was the amount of total liabilities shown on the 2019 balance sheet?
4. What was the total amount of cash that was paid to the bank on Feb. 29, 2020 for principal and interest?
5. What was the amount of interest expense shown on the 2020 income statement?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fae962f3e-f3e3-4765-8a13-e2587d84dd89%2F1edea0dd-40b9-42f4-8423-f5cf6b33229a%2Fid8bcxa_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Florenda Quino Forwarders borrowed P600,000 from the bank on Sept. 1, 2019. The note carried an 8% annual rate of interest and was set to mature on Feb. 29, 2020.
Interest and principal were paid in cash on the maturity date.
Required:
1. What was the amount of interest expense paid in cash in 2019?
2. What was the amount of interest expense recognized on the 2019 income statement?
3. What was the amount of total liabilities shown on the 2019 balance sheet?
4. What was the total amount of cash that was paid to the bank on Feb. 29, 2020 for principal and interest?
5. What was the amount of interest expense shown on the 2020 income statement?
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