On January 1, 2019, Heritage Company has a note payable to bank in the amount P2,800,000. Transaction during 2011 and other information relating to liabilities are: > Principal amount of the note payable to bank is P2,800,000 and bears a 12% interest. The note is dated April 1, 2018 and is payable in four annual installments beginning April 1, 2019.The first principal and interest payment was made on April 1, 2019. > On July 1, 2019, Heritage Company issued for Pl,774,000 a P2,000,000 face amount note to a wealthy shareholder. The note was dated July 1, 2019 and matures on July 1, 2020. No explicit interest rate is stated in the note and the entire face amount of the note is payable at maturity date. Required: a. Compute the total liabilities on December 31, 2019. b. Determine the interest expense to be reported in 2019.Prepare the journal entry.

On January 1, 2019, Heritage Company has a note payable to bank in the amount P2,800,000. Transaction during 2011 and other information relating to liabilities are: > Principal amount of the note payable to bank is P2,800,000 and bears a 12% interest. The note is dated April 1, 2018 and is payable in four annual installments beginning April 1, 2019.The first principal and interest payment was made on April 1, 2019. > On July 1, 2019, Heritage Company issued for Pl,774,000 a P2,000,000 face amount note to a wealthy shareholder. The note was dated July 1, 2019 and matures on July 1, 2020. No explicit interest rate is stated in the note and the entire face amount of the note is payable at maturity date. Required: a. Compute the total liabilities on December 31, 2019. b. Determine the interest expense to be reported in 2019.Prepare the journal entry.

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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