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S3-2. (Learning Objective 1: Explaining how accrual accounting differs from cash-basis accounting) County Corporation began 20X6 owing notes payable of $4.2 million. During 20X6, County borrowed $2.8 million on notes payable and paid off $2.4 million of notes payable from prior years. Interest expense for the year was $1.5 million, including $0.3 million of interest payable accrued at December 31, 20X6. Show what County should report for these facts on the following financial statements: 1. Income Statement a. Interest expense 2. Balance Sheet a. Notes payable b. Interest pavable

S3-2. (Learning Objective 1: Explaining how accrual accounting differs from cash-basis accounting) County Corporation began 20X6 owing notes payable of $4.2 million. During 20X6, County borrowed $2.8 million on notes payable and paid off $2.4 million of notes payable from prior years. Interest expense for the year was $1.5 million, including $0.3 million of interest payable accrued at December 31, 20X6. Show what County should report for these facts on the following financial statements: 1. Income Statement a. Interest expense 2. Balance Sheet a. Notes payable b. Interest pavable

FINANCIAL ACCOUNTING
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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S3-2. (Learning Objective 1: Explaining how accrual accounting differs from cash-basis accounting) County Corporation began 20X6 owing notes payable of $4.2 million. During 20X6, County borrowed $2.8 million on notes payable and paid off $2.4 million of notes payable from prior years. Interest expense for the year was $1.5 million, including $0.3 million of interest payable accrued at December 31, 20X6. Show what County should report for these facts on the following financial statements: LO 1 1. Income Statement a. Interest expense 2. Balance Sheet a. Notes payable b. Interest payable
Transcribed Image Text:S3-2. (Learning Objective 1: Explaining how accrual accounting differs from cash-basis accounting) County Corporation began 20X6 owing notes payable of $4.2 million. During 20X6, County borrowed $2.8 million on notes payable and paid off $2.4 million of notes payable from prior years. Interest expense for the year was $1.5 million, including $0.3 million of interest payable accrued at December 31, 20X6. Show what County should report for these facts on the following financial statements: LO 1 1. Income Statement a. Interest expense 2. Balance Sheet a. Notes payable b. Interest payable
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