Proco had an account payable of $63,000 due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and greed to sign a note payable for the amount due. The note was dated February 1, had an interest rate of 9% per annum, and was sayable with interest on May 31. Required: . Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. . Prepare the journal entries to show each of these transactions and adjustments. Complete this question by entering your answers in the tabs below. Required A Required B Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. Transaction or Adjustment Assets = Balance Sheet Category Liabilities Accounts payable-63.000 OT Answer is not complete. Stockholders' Equity Net Income Effect Income Statement Revenues Expenses Interest expense +945
Proco had an account payable of $63,000 due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and greed to sign a note payable for the amount due. The note was dated February 1, had an interest rate of 9% per annum, and was sayable with interest on May 31. Required: . Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. . Prepare the journal entries to show each of these transactions and adjustments. Complete this question by entering your answers in the tabs below. Required A Required B Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. Transaction or Adjustment Assets = Balance Sheet Category Liabilities Accounts payable-63.000 OT Answer is not complete. Stockholders' Equity Net Income Effect Income Statement Revenues Expenses Interest expense +945
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Proco had an account payable of $63,000 due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on
January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and
agreed to sign a note payable for the amount due. The note was dated February 1, had an interest rate of 9% per annum, and was
payable with interest on May 31.
Required:
a. Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for
Proco on the following:
a. February 1, to show that the account payable had been changed to a note payable.
b. March 31, to accrue interest expense for February and March.
c. May 31, to record payment of the note and all of the interest due to Shirmoo.
b. Prepare the journal entries to show each of these transactions and adjustments.
Complete this question by entering your answers in the tabs below.
Required A Required B
Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following:
a. February 1, to show that the account payable had been changed to a note payable.
b. March 31, to accrue interest expense for February and March.
c. May 31, to record payment of the note and all of the interest due to Shirmoo.
Transaction
or
Adjustment
a.
a.
b.
C.
C.
Assets
Cash-64,890
✔
=
Balance Sheet Category
Liabilities
Accounts payable -63,000
Note payable +63,000
Interest payable +945
Note payable -63,000
Interest payable-945
✔
✓
✓
✔
X Answer is not complete.
+
Stockholders' Equity
< Required A
Net Income Effect
Required B >
=
Income Statement
Revenues
Expenses
Interest expense +945
Interest expense +945
X
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