Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet . To identify: The correct journal entry to record annual payment on December 31, 2019.

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 1QC

To determine

Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet.

To identify: The correct journal entry to record annual payment on December 31, 2019.

Expert Solution & Answer

Explanation of Solution

(a) a debit to Interest expense for $36,000

Record the journal entry for principal payment and interest payment on December 31, 2017:

Date		Account Title and Explanation			Post Ref	Debit ($)	Credit ($)
2019 December	31	Notes Payable				80,000
		Interest Expense				36,000
			Cash				116,000
				(To record the payment of principal and interest)

Table (1)

Working notes:

Calculate interest expense for December 31, 2018 (1^st year).

Interest expense=(Beginning balance on January 1, 2018 × Interest rate ×Time)=$800,000×5100×1 year=$40,000

Calculate interest expense for December 31, 2019 (2^nd year).

Interest expense=(Beginning balance on January 1, 2019 ×Interest rate×Time)=($800,000−$80,000)×5100×1 year=$36,000

Conclusion

Hence, options (b), (c), and (d) are incorrect and option (a) is the correct answer

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 1QC

To determine

Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet.

To identify: The correct journal entry to record annual payment on December 31, 2019.

Expert Solution & Answer

Explanation of Solution

(a) a debit to Interest expense for $36,000

Record the journal entry for principal payment and interest payment on December 31, 2017:

Date		Account Title and Explanation			Post Ref	Debit ($)	Credit ($)
2019 December	31	Notes Payable				80,000
		Interest Expense				36,000
			Cash				116,000
				(To record the payment of principal and interest)

Table (1)

Working notes:

Calculate interest expense for December 31, 2018 (1^st year).

Interest expense=(Beginning balance on January 1, 2018 × Interest rate ×Time)=$800,000×5100×1 year=$40,000

Calculate interest expense for December 31, 2019 (2^nd year).

Interest expense=(Beginning balance on January 1, 2019 ×Interest rate×Time)=($800,000−$80,000)×5100×1 year=$36,000

Conclusion

Hence, options (b), (c), and (d) are incorrect and option (a) is the correct answer

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 1QC

To determine

Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet.

To identify: The correct journal entry to record annual payment on December 31, 2019.

Expert Solution & Answer

Explanation of Solution

(a) a debit to Interest expense for $36,000

Record the journal entry for principal payment and interest payment on December 31, 2017:

Date		Account Title and Explanation			Post Ref	Debit ($)	Credit ($)
2019 December	31	Notes Payable				80,000
		Interest Expense				36,000
			Cash				116,000
				(To record the payment of principal and interest)

Table (1)

Working notes:

Calculate interest expense for December 31, 2018 (1^st year).

Interest expense=(Beginning balance on January 1, 2018 × Interest rate ×Time)=$800,000×5100×1 year=$40,000

Calculate interest expense for December 31, 2019 (2^nd year).

Interest expense=(Beginning balance on January 1, 2019 ×Interest rate×Time)=($800,000−$80,000)×5100×1 year=$36,000

Conclusion

Hence, options (b), (c), and (d) are incorrect and option (a) is the correct answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 1QC

To determine

Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet.

To identify: The correct journal entry to record annual payment on December 31, 2019.

Expert Solution & Answer

Explanation of Solution

(a) a debit to Interest expense for $36,000

Record the journal entry for principal payment and interest payment on December 31, 2017:

Date		Account Title and Explanation			Post Ref	Debit ($)	Credit ($)
2019 December	31	Notes Payable				80,000
		Interest Expense				36,000
			Cash				116,000
				(To record the payment of principal and interest)

Table (1)

Working notes:

Calculate interest expense for December 31, 2018 (1^st year).

Interest expense=(Beginning balance on January 1, 2018 × Interest rate ×Time)=$800,000×5100×1 year=$40,000

Calculate interest expense for December 31, 2019 (2^nd year).

Interest expense=(Beginning balance on January 1, 2019 ×Interest rate×Time)=($800,000−$80,000)×5100×1 year=$36,000

Conclusion

Hence, options (b), (c), and (d) are incorrect and option (a) is the correct answer

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Answer 5

Chapter 12, Problem 1QC

To determine

Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet.

To identify: The correct journal entry to record annual payment on December 31, 2019.

Expert Solution & Answer

Explanation of Solution

(a) a debit to Interest expense for $36,000

Record the journal entry for principal payment and interest payment on December 31, 2017:

Date		Account Title and Explanation			Post Ref	Debit ($)	Credit ($)
2019 December	31	Notes Payable				80,000
		Interest Expense				36,000
			Cash				116,000
				(To record the payment of principal and interest)

Table (1)

Working notes:

Calculate interest expense for December 31, 2018 (1^st year).

Interest expense=(Beginning balance on January 1, 2018 × Interest rate ×Time)=$800,000×5100×1 year=$40,000

Calculate interest expense for December 31, 2019 (2^nd year).

Interest expense=(Beginning balance on January 1, 2019 ×Interest rate×Time)=($800,000−$80,000)×5100×1 year=$36,000

Conclusion

Hence, options (b), (c), and (d) are incorrect and option (a) is the correct answer

Answer 6

Chapter 12, Problem 1QC

To determine

Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet.

To identify: The correct journal entry to record annual payment on December 31, 2019.

Expert Solution & Answer

Explanation of Solution

(a) a debit to Interest expense for $36,000

Record the journal entry for principal payment and interest payment on December 31, 2017:

Date		Account Title and Explanation			Post Ref	Debit ($)	Credit ($)
2019 December	31	Notes Payable				80,000
		Interest Expense				36,000
			Cash				116,000
				(To record the payment of principal and interest)

Table (1)

Working notes:

Calculate interest expense for December 31, 2018 (1^st year).

Interest expense=(Beginning balance on January 1, 2018 × Interest rate ×Time)=$800,000×5100×1 year=$40,000

Calculate interest expense for December 31, 2019 (2^nd year).

Interest expense=(Beginning balance on January 1, 2019 ×Interest rate×Time)=($800,000−$80,000)×5100×1 year=$36,000

Conclusion

Hence, options (b), (c), and (d) are incorrect and option (a) is the correct answer

Answer 7

Chapter 12, Problem 1QC

To determine

Long-Term Notes Payable: Long-term notes payable refers to the obligation of the company in the form of notes to be paid after one year or one operating cycle whichever is longer. Generally the long-term notes payable is reported in the long-term liabilities section of the balance sheet.

To identify: The correct journal entry to record annual payment on December 31, 2019.

Answer 8

Expert Solution & Answer

Explanation of Solution

(a) a debit to Interest expense for $36,000

Record the journal entry for principal payment and interest payment on December 31, 2017:

Date		Account Title and Explanation			Post Ref	Debit ($)	Credit ($)
2019 December	31	Notes Payable				80,000
		Interest Expense				36,000
			Cash				116,000
				(To record the payment of principal and interest)