Rose Company provided the following selected transactions related to liabilities: 2020 Feb. 1 Negotiated a revolving credit agreement with Second Bank which can be renewed annually upon bank approval. The amount available under the line of credit is P30,000,000 at the prime bank rate. April 1 Arranged a 3-month bank loan of P12,000,000 with Second Bank under the line of credit agreement. Interest at the prime rate of 8% was payable at maturity. July 1 Paid the 8% note at maturity. Nov. 1 Supported by the credit line, Rose Company issued P20,000,000 of commercial paper on a nine-month note. Interest was discounted at
Rose Company provided the following selected transactions related to liabilities: 2020 Feb. 1 Negotiated a revolving credit agreement with Second Bank which can be renewed annually upon bank approval. The amount available under the line of credit is P30,000,000 at the prime bank rate. April 1 Arranged a 3-month bank loan of P12,000,000 with Second Bank under the line of credit agreement. Interest at the prime rate of 8% was payable at maturity. July 1 Paid the 8% note at maturity. Nov. 1 Supported by the credit line, Rose Company issued P20,000,000 of commercial paper on a nine-month note. Interest was discounted at
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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![Problem 8-4 (IAA)
Rose Company provided the following selected transactions
related to liabilities:
2020
Feb. 1 Negotiated a revolving credit agreement with
Second Bank which can be renewed annually upon
bank approval.
The amount available under the line of credit is
P30,000,000 at the prime bank rate.
April 1 Arranged a 3-month bank loan of P12,000,000 with
Second Bank under the line of credit agreement.
Interest at the prime rate of 8% was payable at
maturity.
July 1 Paid the 8% note at maturity.
Nov. 1 Supported by the credit line, Rose Company
issued P20,000,000 of commercial paper on a
nine-month note. Interest was discounted at
issuance at a 6% discount rate.
Dec. 31 Recorded any necessary adjusting entry.
2021
Aug. 1 Paid the commercial paper at maturity.
Required:
Prepare the appropriate journal entries through the
maturity of each liability.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8e7339d-339a-4270-abed-7af90f0a9f82%2F09958c9c-7d4e-4dc6-bf0c-0491e4e86334%2F6labw3e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 8-4 (IAA)
Rose Company provided the following selected transactions
related to liabilities:
2020
Feb. 1 Negotiated a revolving credit agreement with
Second Bank which can be renewed annually upon
bank approval.
The amount available under the line of credit is
P30,000,000 at the prime bank rate.
April 1 Arranged a 3-month bank loan of P12,000,000 with
Second Bank under the line of credit agreement.
Interest at the prime rate of 8% was payable at
maturity.
July 1 Paid the 8% note at maturity.
Nov. 1 Supported by the credit line, Rose Company
issued P20,000,000 of commercial paper on a
nine-month note. Interest was discounted at
issuance at a 6% discount rate.
Dec. 31 Recorded any necessary adjusting entry.
2021
Aug. 1 Paid the commercial paper at maturity.
Required:
Prepare the appropriate journal entries through the
maturity of each liability.
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