
Notes payable:
Notes payable is basically a promissory note wherein the amount mentioned has to be paid. The issuer or the borrower has to interest as well and the issuing company will have an interest factor. It is a general ledger liability account.
In other words, the borrower is bound to pay a certain amount under this agreement to the lender within a stipulated time period along with an interest.
To calculate:
The notes payable on the basis of

Answer to Problem 7E
There is no ending balance at the end of each quarter.
Explanation of Solution
Note: Variables rates for the next quarters
Schedule A: Amortisation of note payable without swap
Quarter | Payment | Interest | Principal | Balance |
Beginning | | |||
March | | | | |
June | | | | |
September | | | | |
December | | | | |
March | | | | |
Total | | | |
Note:
Schedule B: quarterly variable versus fixed rate difference
Quarter | Variable rate | Fixed rate | Quarterly interest | Quarterly difference | |
Variable rate (A) | Fixed rate (B) | | |||
June | | | | | |
September | | | | | |
December | | | | | |
March | | | | | |
Total | |
Variables rates for the next quarters:
Summary of entries debit (credit) over the life of not payable as follows:
Particulars | Cash | Notes Payable | Interest | Gain(loss) on debt | Swap asset | Gain(loss)on swap |
Beginning balance | | | ||||
March | | | | |||
June Change in value of swap Quarterly difference | | | | | | |
September Quarterly difference | | | | | | |
December Quarterly difference | | | | | | |
March Quarterly difference | | | | | | |
Ending balance | | | | | | |
CONCLUSION
There is no ending balance at the end of each quarter.
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Chapter 9 Solutions
Advanced Accounting
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