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On April 1st, 2022, the Edmonton Manufacturing Company (EMC) negotiates a loan from the bank for $50,000 with a term of five years, bearing an interest rate of 10%. The loan will require a payment against the principal of $10,000 per year plus interest on March 31st. The EMC has a December 31st year end and prepares adjusting entries and financial statements only once a year. JOURNAL ENTRY APRIL 1ST Prepare the journal entry to record the cash receipt from the loon on April 1st, 2022.✔ JOURNAL ENTRY DECEMBER 31ST Prepare the adjusting entry on December 31st, 2022. How much of the principal is paid on March 31st, 20237 What is the amount of the interest expense that should be recorded on March 31, 2023 for the current year? What is the amount of the interest payable that should be debited on March 31, 2023 for the current year? DR Interest Expense 3,750 CR interest Poyable 1.750 X DR Cash 50,000 CR Note Payable 50,000 ✓ $10.000 £3750 10750

On April 1st, 2022, the Edmonton Manufacturing Company (EMC) negotiates a loan from the bank for $50,000 with a term of five years, bearing an interest rate of 10%. The loan will require a payment against the principal of $10,000 per year plus interest on March 31st. The EMC has a December 31st year end and prepares adjusting entries and financial statements only once a year. JOURNAL ENTRY APRIL 1ST Prepare the journal entry to record the cash receipt from the loon on April 1st, 2022.✔ JOURNAL ENTRY DECEMBER 31ST Prepare the adjusting entry on December 31st, 2022. How much of the principal is paid on March 31st, 20237 What is the amount of the interest expense that should be recorded on March 31, 2023 for the current year? What is the amount of the interest payable that should be debited on March 31, 2023 for the current year? DR Interest Expense 3,750 CR interest Poyable 1.750 X DR Cash 50,000 CR Note Payable 50,000 ✓ $10.000 £3750 10750

FINANCIAL ACCOUNTING
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 April 1st, 2022, the Edmonton Manufacturing Company (EMC) negotiates a loan from the bank for $50,000 with a term of five years, bearing an interest rate of 10%. The loan will require a payment against the principal of $10,000 per year plus interest on March 31st. The EMC has a December 31st year end and prepares adjusting entries and financial statements only once a year. JOURNAL ENTRY APRIL 1ST Prepare the journal entry to record the cash receipt from the loan on April 1st, 2022.✔ JOURNAL ENTRY DECEMBER 31ST Prepare the adjusting entry on December 31st, 2022. How much of the principal is paid on March 31st, 20237 What is the amount of the interest expense that should be recorded on March 31, 2023 for the current year? What is the amount of the interest payable that should be debited on March 31, 2023 for the current year? DR Cash 50,000 CR Note Payable 50,000 DR Interest Expense 3,750 CR interest Payable 3.750 X $10.000 $1750 10750 ✓ •
Transcribed Image Text:On April 1st, 2022, the Edmonton Manufacturing Company (EMC) negotiates a loan from the bank for $50,000 with a term of five years, bearing an interest rate of 10%. The loan will require a payment against the principal of $10,000 per year plus interest on March 31st. The EMC has a December 31st year end and prepares adjusting entries and financial statements only once a year. JOURNAL ENTRY APRIL 1ST Prepare the journal entry to record the cash receipt from the loan on April 1st, 2022.✔ JOURNAL ENTRY DECEMBER 31ST Prepare the adjusting entry on December 31st, 2022. How much of the principal is paid on March 31st, 20237 What is the amount of the interest expense that should be recorded on March 31, 2023 for the current year? What is the amount of the interest payable that should be debited on March 31, 2023 for the current year? DR Cash 50,000 CR Note Payable 50,000 DR Interest Expense 3,750 CR interest Payable 3.750 X $10.000 $1750 10750 ✓ •
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