Rehman & Rehman adjusts its accounts monthly and closes its accounts on December, 31*. on October 31 2000 company signed a notes payable and borrowed Rs. 120,000 from the bank for a period of six months an annual interest rate of 9%. Required: 1. How much is the total interest expense over the life of the note? How much is the monthly interest expense? 2. In company's annual balance sheet at December 31* 2000 what is the amount of liability to the bank? 3. Prepare journal entry to record issuance of notes payable on October 31st 2000. 4. Assume that the company prepares balance sheet on March 31st 2001. State the amount of liability at this date.
Rehman & Rehman adjusts its accounts monthly and closes its accounts on December, 31*. on October 31 2000 company signed a notes payable and borrowed Rs. 120,000 from the bank for a period of six months an annual interest rate of 9%. Required: 1. How much is the total interest expense over the life of the note? How much is the monthly interest expense? 2. In company's annual balance sheet at December 31* 2000 what is the amount of liability to the bank? 3. Prepare journal entry to record issuance of notes payable on October 31st 2000. 4. Assume that the company prepares balance sheet on March 31st 2001. State the amount of liability at this date.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Rehman & Rehman adjusts its accounts monthly and closes its accounts on December, 31*. on
October 31st 2000 company signed a notes payable and borrowed Rs. 120,000 from the bank
for a period of six months an annual interest rate of 9%.
Required:
1. How much is the total interest expense over the life of the note? How much is the
monthly interest expense?
2. In company's annual balance sheet at December 31 2000 what is the amount of
liability to the bank?
3. Prepare journal entry to record issuance of notes payable on October 31st 2000.
4. Assume that the company prepares balance sheet on March 31st 2001. State the
amount of liability at this date.
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