Use the following to answer questions 6 – 10On August 1t, FLY Tech, an Airline maintenancecompany, borrows $300,000 cash from Bank of Americafor working capital. FLY signs a 1 year, 3% promissorynote. Interest is payable when the note is paid off. FLY'syear-end is December 31.How was the loan classified on the company'sDecember 31, year 1 balance sheet?A. Current liabilityB. Long term liabilityC. Note disclosure onlyD. Stockholders’ Equity6.How was the loan classified on the company'sDecember 31, year 1 statement of cash flow?A. Operating activityB. Investing activityC. Financing activity7.D. Not shown on the statement of cash flows$on December 31 of the first year (assume no previousentry was recorded for interest on the loan)?8.How much interest should be accruedWhen the note is paid at maturity2$how much cash is paid to Bank of America?9.When the note is paid at maturity inthe second accounting year, how much does net income10.$decrease?

Use the following to answer questions 6 – 10 On August 1“, FLY Tech, an Airline maintenance company, borrows $300,000 cash from Bank of America for working capital. FLY signs a 1 year, 3% promissory note. Interest is payable when the note is paid off. FLY's vear-end is December 31

Use the following to answer questions 6 – 10 On August 1“, FLY Tech, an Airline maintenance company, borrows $300,000 cash from Bank of America for working capital. FLY signs a 1 year, 3% promissory note. Interest is payable when the note is paid off. FLY's vear-end is December 31

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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