Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1, 2020, and signed a $83,250 (face amount), one-year note payable, due on July 31, 2021. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note Noninterest-Bearing Note a. How much cash should Anne Taylor Company receive on the note, assuming the note is an interest-bearing note? Answer b. Provide the following entries: August 1, 2020, date of the loan. December 31, 2020, adjusting entry. July 31, 2021, payment of the note. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. 1. Aug. 1, 2020 Answer Answer Answer Answer Answer Answer 2. Dec. 31, 2020 Answer Answer Answer Answer Answer Answer 3. July 31, 2021 Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer 4. What liability amount(s) should be shown on the December 31, 2020, balance sheet? Note: List accounts in alphabetical order based on the account name. Balance Sheet, Dec. 31 2020 Current liabilities Answer Answer Answer Answer c. Now assuming that the note is noninterest-bearing, answer the following questions assuming that the company uses the straight-line method to amortize any discount on note payable. How much cash should Anne Taylor Company receive on the note? Answer Provide the following entries: August 1, 2020, date of the loan. December 31, 2020, adjusting entry. July 31, 2021, payment of the note. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. 1. Aug. 1, 2020 Answer Answer Answer Answer Answer Answer Answer Answer Answer 2. Dec. 31, 2020 Answer Answer Answer Answer Answer Answer 3. July 31, 2021 Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer 4. What liability amount(s) should be shown on the December 31, 2020, balance sheet? Note: List accounts in alphabetical order based on the account name. Balance Sheet, Dec. 31 2020 Current liabilities Answer Answer

Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1, 2020, and signed a $83,250 (face amount), one-year note payable, due on July 31, 2021. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note Noninterest-Bearing Note a. How much cash should Anne Taylor Company receive on the note, assuming the note is an interest-bearing note? Answer b. Provide the following entries: August 1, 2020, date of the loan. December 31, 2020, adjusting entry. July 31, 2021, payment of the note. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. 1. Aug. 1, 2020 Answer Answer Answer Answer Answer Answer 2. Dec. 31, 2020 Answer Answer Answer Answer Answer Answer 3. July 31, 2021 Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer 4. What liability amount(s) should be shown on the December 31, 2020, balance sheet? Note: List accounts in alphabetical order based on the account name. Balance Sheet, Dec. 31 2020 Current liabilities Answer Answer Answer Answer c. Now assuming that the note is noninterest-bearing, answer the following questions assuming that the company uses the straight-line method to amortize any discount on note payable. How much cash should Anne Taylor Company receive on the note? Answer Provide the following entries: August 1, 2020, date of the loan. December 31, 2020, adjusting entry. July 31, 2021, payment of the note. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. 1. Aug. 1, 2020 Answer Answer Answer Answer Answer Answer Answer Answer Answer 2. Dec. 31, 2020 Answer Answer Answer Answer Answer Answer 3. July 31, 2021 Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer 4. What liability amount(s) should be shown on the December 31, 2020, balance sheet? Note: List accounts in alphabetical order based on the account name. Balance Sheet, Dec. 31 2020 Current liabilities Answer Answer

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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Question

Recording Entries for Interest-Bearing and Noninterest-Bearing Notes

Anne Taylor Company borrowed cash on August 1, 2020, and signed a $83,250 (face amount), one-year note payable, due on July 31, 2021. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%.

Interest-Bearing Note
Noninterest-Bearing Note

a. How much cash should Anne Taylor Company receive on the note, assuming the note is an interest-bearing note?

Answer

b. Provide the following entries:

August 1, 2020, date of the loan.
December 31, 2020, adjusting entry.
July 31, 2021, payment of the note.

Note: List multiple debits or credits (when applicable) in alphabetical order.
Note: Round your answers to the nearest whole dollar.

	Date	Account Name	Dr.	Cr.
1.	Aug. 1, 2020	Answer	Answer	Answer
		Answer	Answer	Answer
2.	Dec. 31, 2020	Answer	Answer	Answer
		Answer	Answer	Answer
3.	July 31, 2021	Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer

4. What liability amount(s) should be shown on the December 31, 2020, balance sheet?

Note: List accounts in alphabetical order based on the account name.

	Balance Sheet, Dec. 31	2020
	Current liabilities
	Answer	Answer
	Answer	Answer

c. Now assuming that the note is noninterest-bearing, answer the following questions assuming that the company uses the straight-line method to amortize any discount on note payable.

How much cash should Anne Taylor Company receive on the note?

Answer

Provide the following entries:

August 1, 2020, date of the loan.
December 31, 2020, adjusting entry.
July 31, 2021, payment of the note.

Note: List multiple debits or credits (when applicable) in alphabetical order.
Note: Round your answers to the nearest whole dollar.

	Date	Account Name	Dr.	Cr.
1.	Aug. 1, 2020	Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer
2.	Dec. 31, 2020	Answer	Answer	Answer
		Answer	Answer	Answer
3.	July 31, 2021	Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer

4. What liability amount(s) should be shown on the December 31, 2020, balance sheet?

Note: List accounts in alphabetical order based on the account name.

	Balance Sheet, Dec. 31	2020
	Current liabilities
	Answer	Answer

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