Problem 9-97BEntries for and Financial Statement Presentation of a Note Griddley Company borrowed $200,000 from the East Salvador Bank on February 1, 2013, on a 3-year, 8.6% note. Interest is paid annually on February 1. If required, round amounts to the nearest dollar. Required: Hide 1. Record the borrowing transaction in Griddley's journal. 2013 Feb. 1 Record issuance of notes at par Hide 2. Prepare the adjustments made at December 31, 2013 and 2014. 2013 Dec. 31 Record interest expense 2014 Dec. 31 Record interest expense Hide 3. Prepare the necessary journal entry to recognize the first interest payment on February 1, 2014. If an amount box does not require an entry, leave it blank. 2014 Feb. 1 Record interest expense and interest payment Hide 4. Indicate how the note and associated interest would be presented in Griddley's December 31, 2014 balance sheet. Griddley Company Balance Sheet (partial) December 31, 2014 Current liabilities: $ Long-term liabilities: Hide 5. Prepare the necessary journal entries to record the repayment of the note and the last year's interest payment on February 1, 2016. For a compound journal entry, if an amount box does not require an entry, leave it blank. 2016 Feb. 1 Record interest expense and interest payment 2016 Feb. 1 Record repayment of note principal

Problem 9-97BEntries for and Financial Statement Presentation of a Note Griddley Company borrowed $200,000 from the East Salvador Bank on February 1, 2013, on a 3-year, 8.6% note. Interest is paid annually on February 1. If required, round amounts to the nearest dollar. Required: Hide 1. Record the borrowing transaction in Griddley's journal. 2013 Feb. 1 Record issuance of notes at par Hide 2. Prepare the adjustments made at December 31, 2013 and 2014. 2013 Dec. 31 Record interest expense 2014 Dec. 31 Record interest expense Hide 3. Prepare the necessary journal entry to recognize the first interest payment on February 1, 2014. If an amount box does not require an entry, leave it blank. 2014 Feb. 1 Record interest expense and interest payment Hide 4. Indicate how the note and associated interest would be presented in Griddley's December 31, 2014 balance sheet. Griddley Company Balance Sheet (partial) December 31, 2014 Current liabilities: $ Long-term liabilities: Hide 5. Prepare the necessary journal entries to record the repayment of the note and the last year's interest payment on February 1, 2016. For a compound journal entry, if an amount box does not require an entry, leave it blank. 2016 Feb. 1 Record interest expense and interest payment 2016 Feb. 1 Record repayment of note principal

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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Problem 9-97B
Entries for and Financial Statement Presentation of a Note

Griddley Company borrowed $200,000 from the East Salvador Bank on February 1, 2013, on a 3-year, 8.6% note. Interest is paid annually on February 1.

If required, round amounts to the nearest dollar.

Required:

Hide

1. Record the borrowing transaction in Griddley's journal.

2013 Feb. 1

Record issuance of notes at par

Hide

2. Prepare the adjustments made at December 31, 2013 and 2014.

2013 Dec. 31

Record interest expense

2014 Dec. 31

Record interest expense

Hide

3. Prepare the necessary journal entry to recognize the first interest payment on February 1, 2014. If an amount box does not require an entry, leave it blank.

2014 Feb. 1

Record interest expense and interest payment

Hide

4. Indicate how the note and associated interest would be presented in Griddley's December 31, 2014 balance sheet.

Griddley Company

Balance Sheet (partial)

December 31, 2014

Current liabilities:

Long-term liabilities:

Hide

5. Prepare the necessary journal entries to record the repayment of the note and the last year's interest payment on February 1, 2016. For a compound journal entry, if an amount box does not require an entry, leave it blank.

2016 Feb. 1

Record interest expense and interest payment

2016 Feb. 1

Record repayment of note principal

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