Marquis Smith started IT Consulting Services Incorporated on January 1, Year 1. The company experienced the following events duringits first year of operation:1. On June 1, Year 1, the company borrowed $21,600 cash from the bank. The note had a one-year term and 6% annual interest rate.2. On December 31, Year 1, the company adjusted the accounting records to recognize accrued interest expense on the bank note.Required:Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement ofcash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classifythe cash flows as operating activities (OA), investing activities (IA), or financing activities (FA).Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.Event NumberAssetsCash1.2.Total"NC= Net change in cash=0 =0 =NotesPayableLiabilities+Balance Sheet0+0 +InterestPayable+0 ++0 +Stockholders' EquityRetainedEarningsCommonStock+0 +0+0+00Income StatementRevenue - Expenses = Net Income000-0 ==0 =00Statement of CashFlows00FANC

The accounting equation can be presented as shown below: -, or

Answered: Marquis Smith started IT Consulting…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

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abardeen corporation borrowed 58,000 from the bank on october 1, year 1. the note had a 4 percent annual rate of interest and matured on march 31, year 2. interest and principal were paid in cash on the maturity date. d. what total amount of cash was paid to the bank on march 31, year 2, for principle and interest? e. what amount of interest expense was reported on the year 2 income statement?
abardeen corporation borrowed 58,000 from the bank on october 1, year 1. The note had a 4 percent annual rate of interest and matured on march 31, year 2. interest and principal were paid in cash on the maturity date. a. what amount of cash did abardeen pay for interest in year 1? b. what amount of interest expense was recognized on the year 1 income statement? c. what amount of total liabilities was reported on december 31, year 1, balance sheet?
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Abardeen Corporation borrowed $105,000 from the bank on October 1, Year 1. The note had an 4 percent annual rate of interest and matured on March 31, Year 2. Interest and principal were paid in cash on the maturity date. Required a. What amount of cash did Abardeen pay for interest in Year 1? b. What amount of interest expense was recognized on the Year 1 income statement? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) c. What amount of total liabilities was reported on the December 31, Year 1, balance sheet? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) d. What total amount of cash was paid to the bank on March 31, Year 2, for principal and interest? e. What amount of interest expense was reported on the Year 2 income statement? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) a. Amount of cash paid b. Interest expense c. Total liabilities d. Amount of cash…
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