The Eldorado Corporation’s controller prepares adjusting entries only at the end of the reporting year. The following adjusting entries were prepared on December 31, 2021: Debit Credit Interest expense 3,240 Interest payable 3,240 Rent expense 8,250 Prepaid rent 8,250 Interest receivable 300 Interest revenue 300 Additional information: The company borrowed $108,000 on March 31, 2021. Principal and interest are due on March 31, 2022. This note is the company’s only interest-bearing debt. Rent for the year on the company’s office space is $33,000. The rent is paid in advance. On October 31, 2021, Eldorado lent money to a customer. The customer signed a note with principal and interest at 3.0% due in one year. Required: 1. What is the interest rate on the company's note payable? 2. The 2021 rent payment was made at the beginning of which month? (Do not round your intermediate calculation.) 3. How much did Eldorado lend its customer on October 31?
The Eldorado Corporation’s controller prepares adjusting entries only at the end of the reporting year. The following adjusting entries were prepared on December 31, 2021: Debit Credit Interest expense 3,240 Interest payable 3,240 Rent expense 8,250 Prepaid rent 8,250 Interest receivable 300 Interest revenue 300 Additional information: The company borrowed $108,000 on March 31, 2021. Principal and interest are due on March 31, 2022. This note is the company’s only interest-bearing debt. Rent for the year on the company’s office space is $33,000. The rent is paid in advance. On October 31, 2021, Eldorado lent money to a customer. The customer signed a note with principal and interest at 3.0% due in one year. Required: 1. What is the interest rate on the company's note payable? 2. The 2021 rent payment was made at the beginning of which month? (Do not round your intermediate calculation.) 3. How much did Eldorado lend its customer on October 31?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...
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The Eldorado Corporation’s controller prepares
| Debit | Credit | |
| Interest expense | 3,240 | |
| Interest payable | 3,240 | |
| Rent expense | 8,250 | |
| Prepaid rent | 8,250 | |
| Interest receivable | 300 | |
| Interest revenue | 300 | |
Additional information:
- The company borrowed $108,000 on March 31, 2021. Principal and interest are due on March 31, 2022. This note is the company’s only interest-bearing debt.
- Rent for the year on the company’s office space is $33,000. The rent is paid in advance.
- On October 31, 2021, Eldorado lent money to a customer. The customer signed a note with principal and interest at 3.0% due in one year.
Required:
1. What is the interest rate on the company's note payable?
2. The 2021 rent payment was made at the beginning of which month? (Do not round your intermediate calculation.)
3. How much did Eldorado lend its customer on October 31?
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