Required information[The following information applies to the questions displayed below.]1/11/112/3112/31On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $76,500 face value, four-year term notethat had an 8 percent annual interest rate The note is to be repaid by making annual cash payments of $23,097 thatinclude both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase landthat generated rental revenues of $35,955 cash per year.b. Organize the information in accounts under an accounting equation.Note: Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. Ifthere is no effect on the Account Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.EventYear 1BalanceYear 2Beginning balanceBROWN COMPANYEffect of Events on the Accounting EquationYear 1, Year 2, Year 3 and Year 4LiabilitiesNotesPayableCashAssets+ Land76,500+(76,500) ++H76,500 =1176,500+0+ 76,500 = 76,500+||+Stockholders'EquityRetainedEarnings0Account Titles forRetained Earnings

The accounting equation is sum of assets=sum of liabilities and owner's equity. The items of income…

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Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
[The following information applies to the questions displayed below.] On January 1, MM Company borrows $340,000 cash from a bank and in return signs an 8% installment note for five annual payments of $85,155 each. 1. Prepare the journal entry to record issuance of the note. 2. For the first $85,155 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For the first $85,155 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note? Interest expense Principal reduction
Dan Dayle started a business by issuing an $92,000 face value note to First State Bank on January 1, Year 1. The note had a 7 percent annual rate of interest and a five-year term Payments of $22,438 are to be made each December 31 for five years. Required: a. What portion of the December 31, Year 1. payment is applied to interest expense and principal? b. What is the principal balance on January 1, Year 2? c. What portion of the December 31, Year 2, payment is applied to interest expense and principal? Note: Round your answers to the nearest dollar amount. a. Interest expense a. Principal b. Principal balance c. Interest expense c. Principal
Martinez Co. borrowed $56,952 on March 1 of the current year by signing a 60-day, 8%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a a. debit to Interest Payable for $759. b. debit to Interest Expense for $759. C. credit to Cash for $56,952. d. credit to Cash for $61,508. MacBook Pro
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Martinez Co. borrowed $58,220 on March 1 of the current year by signing a 60-day, 11%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a Oa. debit to Interest Payable for $1,067. b. debit to Interest Expense for $1,067. Oc. credit to Cash for $58,220. Od. credit to Cash for $64,624.

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