On January 1, Year 1, Platte Corporation issues a 5-year note payable for $5,000. The interest rate is 5% and the annual payment of $1,156, due each December 31, includes both interest and principal.Which of the following shows the effect of the December 31, Year 1 payment?Assets = Liabilities +A. (1,156)B. (1,156)C. (1,156)D. (1,156)Multiple ChoiceOOOBalance SheetO(1,156)(906)n/a(906)Option COption AOption BOption DStockholders'Equityn/a(250)(1,156)(250)Revenuen/an/an/an/aIncome StatementExpensen/a2501,156250= Net Incomen/a(250)(1,156)(250)Statement of Cash Flows(1,156) FA(906) FA/(250) OA(1,156) OA(1,156) FA

Note payable is a negotiable instrument issued by the payer to the payee to pay certain amount of…

On January 1, Year 1, Platte Corporation issues a 5-year note payable for $5,000. The interest rate is 5% and the annual payment of $1,156, due each December 31, includes both interest and principal. Which of the following shows the effect of the December 31, Year 1 payment? Assets A. (1,156) B. (1,156) C. (1,156) D. (1,156) Multiple Choice OOO Balance Sheet Liabilities + (1,156) (906) n/a (906) Option C Option A Option B Stockholders' Equity n/a (250) (1,156) (250) Revenue n/a n/a n/a n/a Income Statement Expense = Net Income n/a n/a 250 (250) (1,156) (250) 1,156 250 Statement of Cash Flows (1,156) FA (906) FA/(250) OA (1,156) OA (1,156) FA

On January 1, Year 1, Platte Corporation issues a 5-year note payable for $5,000. The interest rate is 5% and the annual payment of $1,156, due each December 31, includes both interest and principal. Which of the following shows the effect of the December 31, Year 1 payment? Assets A. (1,156) B. (1,156) C. (1,156) D. (1,156) Multiple Choice OOO Balance Sheet Liabilities + (1,156) (906) n/a (906) Option C Option A Option B Stockholders' Equity n/a (250) (1,156) (250) Revenue n/a n/a n/a n/a Income Statement Expense = Net Income n/a n/a 250 (250) (1,156) (250) 1,156 250 Statement of Cash Flows (1,156) FA (906) FA/(250) OA (1,156) OA (1,156) FA

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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Subject : Accounting
8
Chico Company borrowed $40,000 on a four-year, 8% installment note. How will this transaction affect Chico's financial statements? Multiple Choice O O Cash and notes payable increase by $43,200 Cash and interest payable increase by $40,000 Cash and notes payable increase by $40,000 Cash and interest payable increase by $43,200
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $27,000,000 of 5-year, 9% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Ebert receiving cash of $24,964,830. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. 2. First semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. 3. Second semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. b. Compute the amount of the bond interest expense for the first year. Round to the nearest dollar. Annual interest paid Discount amortized Interest expense for first…
An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $25,000,000 of 5-year, 9% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Ebert receiving cash of $23,115,584. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable 2. First semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Cash 3. Second semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Cash b. Compute the amount of…
Comly Communications issues a $600,000, 10%, 20-year mortgage note on January 1. The terms provide for annual installment payments of $69,932, exclusive of real estate taxes and insurance. After the first installment payment, the principal balance is $590,068. $530,068 $565,034. $600,000.
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Record the Year 1 transactions in general journal form.
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13, please read the question carefully and follow the instructions. thanks