Solve with explanation accounting On March 1, 2016, Mandau Services issued a 3%long-term note payable for $15,000. It ispayable over a 3-year term in $5,000 principalinstallments on March 1 of each year beginningMarch 1, 2017. Each yearly installment willinclude both principal repayment of $5,000 andinterest payment for the preceding one-yearperiod. What is the amount of total cashpayment that Mandau will make on March 1, 2017?0 $5,0000 $5,4500 $15,0000 $5,225

Step 1: Define Principal payment and Interest ExpenseEvery debt instrument has two parts, the…

Answered: On March 1, 2016, Mandau Services…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
On March 1, 2024, Lewis Services issued a 10% long - term notes payable for $24,000. It is payable over a 6– year term in $4000 principal installments on March 1 of each year, beginning March 1, 2025. Which of the following entries needs to be made on March 1, 2024? O A. Current Portion of Long - Term Notes Payable Long- Term Notes Payable 24,000 24,000 O B. Long - Term Notes Payable Accounts Payable 24,000 24,000 O C. Long - Term Notes Payable 4000 Cash 4000 O D. Cash 24,000 Long - Term Notes Payable 24,000
On January 1, 2018, the Merit Group issued to its bank a $41 million, five-year installment note to be paid infive equal payments at the end of each year. Installment payments of $10 million annually include interest atthe rate of 7%. What would be the amount(s) related to the note that Merit would report in its statement of cashflows for the year ended December 31, 2018?
On January 1, 2016, the Merit Group issued to its bank a $41 million, five-year installment note to be paid in five equal payments at the end of each year. Installment payments of $10 million annually include interest at the rate of 7%. What would be the amount(s) related to the note that Merit would report in its statement of cash flows for the year ended December 31, 2016?
Purdum Farms borrowed $10 million by signing a five-year note on December 31, 2015. Repayments of the principal are payable annually in installments of $2 million each. Purdum Farms makes the first payment on December 31, 2016 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2016, after the first payment is made? Zero in current liabilities and $10 million in long-term liabilities. $2 million in current liabilities and $6 million in long-term liabilities. $2 million in current liabilities and $8 million in long-term liabilities. Zero in current liabilities and $8 million in long-term liabilities.
On January 1, 2020, Heritage Company has a note payable to bank in the amount 2,800,000. Transactions during 2020 and other information relating to liabilities are: a. Principal amount of the note payable to bank is 2,800,000 and bears a 12% interest. The note is dated April 1, 2019 and is payable in four equal annual installments beginning April 1, 2020. The first principal and interest payment was made on April 1, 2020 b. On July 1, 2020, the entity issued for 1,774,000 a 2,000,000 face amount note to a wealthy shareholder. The note was dated July 1, 2020 and matures on July 1, 2021. No explicit interest rate is stated in the note and the entire face amount of the note payable at maturity date Required 1. Prepare journal entries for 2020. 2. Compute the total current liabilities on December 31, 2020 3. Determine the interest expense to be reported in 2020
On September 1, 2020, Halley Co. issued a note payable to Fidelity Bank in the amount of $2,700,000, bearing interest at 10%, and payable in three equal annual principal payments of $900,000. On this date, the bank's prime rate was 11%. The first payment for interest and principal was made on September 1, 2021. At December 31, 2021, Halley should record accrued interest payable of: O $99,000. O $90,000. O $60,000. O $198,000. 4
Barton Chocolates used a promissory note to borrow $1,000,000 on July 1, 2015, at an annualinterest rate of 6 percent. The note is to be repaid in yearly installments of $200,000, plusaccrued interest, on June 30 of every year until the note is paid in full (on June 30, 2020). Showhow the results of this transaction would be reported in a classified balance sheet prepared as ofDecember 31, 2015.
Barton Chocolates used a promissory note to borrow $1,350,000 on July 1, 2018, at an annual interest rate of 6 percent. The note is to be repaid in yearly installments of $270,000, plus accrued interest, on June 30 of every year until the note is paid in full (on June 30, 2023). Show how the results of this transaction would be reported in a classified balance sheet prepared as of December 31, 2018. (Do not round intermediate calculations.)
On January 1, 2021, a company borrowed $500,000 from a local bank by issuing an 8% note due in four years. The bank requires the company to make annual installment payments of $150,960.40 each December 31 over the four years.Required:(a) Complete the amortization schedule for the four-year loan, (b) record the issuance of the note, and record the (c) first annual installment payment and (d) second annual installment payment. How would your answers change if the company borrowed only $400,000 at 6% for four years?

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