Note Payable of $6,000 represents a loan that was taken on June 1, 2019 at a yearly interest rate of 10%. The journal entry recorded for the receipt of the loan on June 1, 2019 was: Debit Interest Expense $6,000, credit Interest Payable $6,000 Debit cash $1,200, credit Interest payable $1,200 Debit cash $6,000, credit note payable $6,000 Debit Interest Expense $600, credit Note Payable $600

Note Payable of $6,000 represents a loan that was taken on June 1, 2019 at a yearly interest rate of 10%. The journal entry recorded for the receipt of the loan on June 1, 2019 was: Debit Interest Expense $6,000, credit Interest Payable $6,000 Debit cash $1,200, credit Interest payable $1,200 Debit cash $6,000, credit note payable $6,000 Debit Interest Expense $600, credit Note Payable $600

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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On June 30, 2020, Amoro Company takes out a $5,000 loan documented through a note payable. Interest will be 16% annually and the note matures on June 30, 2021. The interest to be accrued at December 31, 2020 will be: о $400 0 $800 0 $0 0 $467
Complete the next line of the schedule.
At December 31, 2021, Sheridan Company had a five-month, 5%, $79,200 note receivable that was issued on October 1, 2021. Interest and principal are payable at maturity on March 1, 2022. Prepare the March 1, 2022, entry to record the receipt of cash at maturity for the note
Campus Flights takes out a bank loan in the amount of $200,500 on March 1, 2019. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31, the fiscal year-end date. The interest recognized for the first payment date as of December 31, 2019 is $13,267. The interest recognized for the year 2020 as of the first payment date is $16,040. The principal due on the first payment date, March 1, 2020 is $186,659. 1. Compute the interest recognized for the second payment date as of December 31, 2020. _______________ 2. Compute the total interest for the year 2020. __________ IMPORTANT: Please count your months carefully as the note's "year" crosses between two fiscal years.
At December 31, 2021, Sheridan Company had a five-month, 5%, $79,200 note receivable that was issued on October 1, 2021. Interest and principal are payable at maturity on March 1, 2022. Prepare the December 31, 2021, adjusting entry for accrued interest. Prepare the January 1, 2022, reversing entry.
On August 1, 2018, Mills Company borrowed $109000 cash on a one-year note that required Mills to pay 10 percent interest and $109000 principal, both on July 31, 2019. Assuming the note is paid when due in 2019, what is the debit to interest expense when recording the payment of the note?
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