LO1 EXERCISE 4.8 Ventura Company adjusts its accounts monthly and closes its accounts on December 31. On Octo- ber 31, 2009, Ventura Company signed a note payable and borrowed $120,000 from a bank for a period of six inonths at an annual interest rate of 9 percent. How much is the total intercst expensc over the life of the note? How much is the monthly interest expense? (Assume equal amounts of interest expense cach mondi.) Notes Payable and Interest L02 a. In the company's annual balance sheet at December 31, 2009, what is the amount of the liabil- ity to the bank? Prepare the journal entry to record issuance of the note payable on October 31, 2009. Prepare the adjusting entry to accrue interest on the note at December 31, 2009. Assume the company prepared a balance shect at March 31, 2010. State the aniount of the liability to thec bank at this date. b. с. d. с.
LO1 EXERCISE 4.8 Ventura Company adjusts its accounts monthly and closes its accounts on December 31. On Octo- ber 31, 2009, Ventura Company signed a note payable and borrowed $120,000 from a bank for a period of six inonths at an annual interest rate of 9 percent. How much is the total intercst expensc over the life of the note? How much is the monthly interest expense? (Assume equal amounts of interest expense cach mondi.) Notes Payable and Interest L02 a. In the company's annual balance sheet at December 31, 2009, what is the amount of the liabil- ity to the bank? Prepare the journal entry to record issuance of the note payable on October 31, 2009. Prepare the adjusting entry to accrue interest on the note at December 31, 2009. Assume the company prepared a balance shect at March 31, 2010. State the aniount of the liability to thec bank at this date. b. с. d. с.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:L01 EXERCISE 4.8
Notes Payable and
Ventura Company adjusts its accounts monthly and closes its accounts on December 31. On Octo-
ber 31, 2009, Ventura Company signed a note payable and borrowed $120,000 from a bank for a
period of six inonths at an annual interest rate of 9 percent.
Interest
L02
How much is the total intercst expensc over the life of the note? How much is the monthly
interest expense? (Assume equal amounts of interest expense cach monuı.)
8.
15
b.
In the compeny's annual balance sheet at December 31, 2009, what is the amount of the liabil-
ity lo the bank?
Prepare the journal entry to record issuance of the note payable on October 31, 2009.
Prepare the adjusting entry to accrue interest on the note at December 31, 2009.
Assume the company prepared a balance shect at March 31, 2010. State the anount of the
liability to thc bank at this date.
C.
d.
C.
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