On June 1, 2020, Waterway Industries loaned Carla Vista $504000 on a 11% note, payable in five annual installments of $100800beginning January 2, 2021. In connection with this loan, Carla Vista was required to deposit $5040 in a zero-interest-bearing escrowaccount. The amount held in escrow is to be returned to Carla Vista after all principal and interest payments have been made. Intereston the note is payable on the first day of each month beginning July 1, 2020. Carla Vista made timely payments through November 1,2020. On January 2, 2021, Waterway received payment of the first principal installment plus all interest due. At December 31, 2020,Waterway's interest receivable on the loan to Carla Vista should beO $0.O $14280.O $9240.O $5040.

Calculation of Waterway's interest receivable on loan to Carla Vista. Interest receivable =…

Answered: On June 1, 2020, Waterway Industries…

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 February 10, 2021, after issuance of its financial statements for 2020, Sunland Company entered into a financing agreement with Cleveland Bank, allowing Sunland Company to borrow up to $8060000 at any time through 2023. Amounts borrowed under the agreement bear interest at 3% above the bank's prime interest rate and mature two years from the date of loan. Sunland Company presently has $3100000 of notes payable with Star National Bank maturing March 15, 2021. The company intends to borrow $4910000 under the agreement with Cleveland and liquidate the notes payable to Star National Bank. The agreement with Cleveland also requires Sunland to maintain a working capital level of $12050000 and prohibits the payment of dividends on common stock without prior approval by Cleveland Bank. From the above information only, the total short-term debt of Sunland Company as of the December 31, 2020 balance sheet date is $8060000. $0. $3990000. $3100000.
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Da
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