rate was 11%. The first payment for interest and principal was made on September 1, Year 2. At December 31, Year 2, Cobb should record accrued interest payable of $33,000.

Q: On 1 November, Year 1, Noble Co. borrowed P80,000 from South Bank and signed a 12%, six-month note…

A: Solution: Interest on note at maturity = P * R* T = P80,000 * 12%*6/12 = P4,800

Q: On the last day of October, Wright Company borrows $120,000 on a bank note for 60 days at 11 percent…

A: This question is asking about the Journal entries for 31 October of issue of notes, 30 November of…

Q: The following note transactions occurred during the year for Towell Company: On Nov. 25, Towell…

A: Interest is an expense which is to be paid to the lender or creditor for making late payment for the…

Q: On February 1, Electronic Warehouse Co. issued a 45-day note with a face amount of $80,000 to Yamura…

A: Notes are issued by the organisation for receivables and payables that are to be received or paid in…

Q: Keesha Co. borrows $200,000 cash on November 1 of the current year by signing a 90-day, 9%, $200,000…

A: Note payable is issued to creditors for the money borrowed. It includes the terms for the interest,…

Q: Goldie Corporation takes out a $10,000 cash loan from its bank by signing a 15%, 9-month promissory…

A: A promissory note is a financial instrument that includes a written promise to pay a certain sum of…

Q: October 1, Dutta Incorporated borrowed $94 million and issued a nine-month promissory note. Interest…

A: A journal entry is a basic accounting  that is used to record transaction in chronological…

Q: Leach Company borrowed $95,000 cash by issuing a note payable on June 1, Year 1. The note had an 6…

A: The company can issue notes to borrow funds. The note can be issued either for the long term or the…

Q: On January 1, Year 1, Beatie Company borrowed $400,000 cash from Central Bank by issuing a…

A: Amortization schedule of interest and principal payment for 5 periods is as under:

Q: Colson Company has a line of credit with Federal Bank. Colson can borrow up to $362,500 at any time…

A: The line of credit is a facility that a bank extends to its customer, it is an arrangement between…

Q: On the first day of the fiscal year, a company issues $32,000, 11%, five-year installment notes that…

A: The journal is the book in which the company will record the transactions in chronological manner.…

Q: On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 90-day note with a face amount…

A: Approach to solving the question:For better clarity of the solution, I have provided the calculation…

Q: [The following information applies to the questions displayed below.] On January 1, MM Company…

A: The principal amount gets decreased with the excess payment of installment over and above the…

Q: NYJ, Inc. borrowed $500,000 on November 1, 20X1, and signed a nine-month note bearing interest at…

A: The notes payable require the borrower company to pay interest expense. The interest expense is…

Q: Martinez Co. borrowed $52,557 on March 1 of the current year by signing a 60-day, 12%,…

A: Notes payable is categorized as a negotiable instrument signed by the promisor who agreed to pay a…

Q: On June 1, Davis Inc. issued an $81,200, 8%, 120-day note payable to Garcia Company Assume that the…

A: Interest revenue = face value of not x rate of interest x No. of days / 360 days

Q: Prefix Supply Company received a 60-day, 4% note for $46,000 dated July 12 from a customer on…

A: Journal: Recording of a business transaction in a chronological order.

Q: Madison Company issued an interest-bearing note payable with a face value of $24,000 and a stated…

A: Note payable refers to the amount for which the individual or the company has written to pay the…

Q: Madison Company issued an interest-bearing note payable with a face value of $9,600 and a stated…

A: Total liabilities are the sum of a person's or company's debts. They fall into three broad…

Q: Prefix Supply Company received a 120-day, 8% note for $450,000, dated April 9 from a customer on…

A: Note is a form of debt issued or taken by the company. Interest has to be paid or received on the…

Q: Keesha Company borrows $260,000 cash on November 1 of the current year by signing a 120-day, 11%,…

A: Lets understand the basics. Entity issues note in order to obtain finance from the outside. In notes…

Q: 1) On October 1, 20x1, Metro Bank loaned $8,000,000 and received a 5-month promissory note with 10%…

A: Note is kind of instrument which are commonly used by the lender and borrower at the time of giving…

Q: c. How will the annual note payment be reported in the Year 1 income statement? of $ would be…

A: Interest expenses of $5720 will be in Income Statement in Year 1.

Q: Keesha Co. borrows $100,000 cash on November 1 of the current year by signing a 150-day, 10%,…

A: The 150 days from November  1 will expire on March 31. Thetefore, Note will expire on March 31 next…

Q: Havier Corporation borrows $1 million from a bank on September 1, Year 1, by signing a 6 percent,…

A: The journal entry for the above is Note payable A/C dr.     $10,00,000 Interest expense A/c dr.…

Q: On January 26, Nyree Co. borrowed cash from Conrad Bank by Issuing a 90-day note with a face amount…

A: Notes are issued to borrow funds. It is a promise by the borrower to repay the funds borrowed on…

Q: On September 1, 2022, Accounts receivable in the amount of $900,000 were assigned as collateral to…

A: Answer:- Journal entry meaning:- The act of maintaining or creating records of any transactions,…

Q: On May 1, Knack Company signed a $80,000, 240-day, 6% note payable with Central Savings Bank. What…

A: Notes payable is current liabilities if it is due to pay able with one year. Interest is also…

Q: During 2024, Lane Co. borrowed cash from Greenberg Company by issuing notes payable as follows: 1.…

A: The company can borrow funds by issuing notes. The amount borrowed by issuing notes is shown as…

Q: Amenadiel Co. has an 8% note receivable dated June 30, year 1, in the original amount of 150,000.…

A: A written promise to receive a sum of money at the pre determined future date is referred to as note…

Q: On November 1, Bahama Cruise Lines borrows $4 million and issues a six-month, 6% note payable.…

A: Interest expense = Notes payable x rate of interest x time = $4,000,000 x 6% x 2/12 = $40,000

Q: Dan Dayle started a business by issuing an $92,000 face value note to First State Bank on January 1,…

A: Formula:Interest expense = Principal amount x Interest rate x Time period

Q: On July 1, Year 1, the Barley Company loaned $50,000 to the Jackson Co. The note has a stated…

A: Given:Principal loaned - $50,000Interest rate – 10%Date of note issued – July 1, Year 1Maturity date…

Q: On the first day of the fiscal year, Shiller Company borrowed $22,000 by giving a five-year, 12%…

A: Notes payable: Notes payable can be defined as an instrument where a borrower promises to repay the…

Q: Lundquist Company received a 60-day, 7% note for $79,000, dated July 23, from a customer on account.…

A: Note receivable:  Note receivable refers to a written promise received by the creditor from the…

Q: On December 16, Carboy, Incorporated, borrows $120,000 cash from Third National Bank at 9 percent…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: Keesha Company borrows $290,000 cash on December 1 of the current year by signing a 180-day, 8%,…

A: Solution: To borrow cash, business issues notes payable that contain principal amount of note,…

Q: On the first day of the fiscal year, a company issues $63,000, 12%, five-year installment notes that…

A: NOTES PAYABLE   Notes Payable is Liabilities in Nature. Notes Payable is Generally Long term…

Q: Dan Dayle started a business by issuing an $85,000 face value note to First State Bank on January 1,…

A: >Note Payables are the liabilities.>It can be issued in case of:--when goods are purchased on…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.