Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 7, Problem 69PB
1.
To determine
Prepare an amortization schedule for first four payments of Incorporation ZD.
2.
To determine
Calculate the total interest expense related to these two loans would Incorporation ZD shown on income statement for the year ended December 31, 2009.
3.
To determine
Calculate the total interest payable would Incorporation ZD show on its
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following information pertains to Sunland Ltd. In 2024 the company entered into new borrowings using short-term notes payable.
On June 30, they borrowed $10,900 that they planned to use to purchase new office equipment, the interest rate on the note was 6%
with both interest and principal repayable in 6 months (December 31st). On October 1st, the company financed the purchase of a used
vehicle costing $65,400 using a 12 month note payable at 8% with interest payments due quarterly and the principal amount due at
maturity. The company's year end is December 31st.
Record the journal entries for the issuance of both notes and any interest entries that need to be made up to and including December
31, 2024. Assume that no interest expense was accrued during the year. (Record journal entries in the order presented in the problem.
Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry"
for the account…
The following are selected items from the accounting records of Atlanta Peach for the year ended December 31, 2011:
I have attached information as a image.
Other Information
The note payable to Southern Bank is due in 60 days. Arrangements have been made to renew this note for an additional 24 months.
The mortgage requires payments of $10,000 per month. An amortization table shows that its balance will be paid down to $733,000 by December 31, 2012.
Accrued interest on the mortgage note payable is paid monthly. The next payment is due near the end of the first week in January 2012.
Atlanta Peach has been sued for $2,000,000 in a product damage case. It is not possible at this time, however, to make a reasonable estimate of the possible loss, if any, that the company may have sustained.
Requirements:
Using the information provided, prepare the current and long-term liability sections of the company’s balance sheet dated December 31, 2011. (Within each classification, items may be…
[The following information applies to the questions displayed below.]
On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that
had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include
both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that
generated rental revenues of $52,000 cash per year.
b. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount.
Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles / Retained Earnings,
leave the cell blank.)
BROWN CO.
Effect of Events on the Accounting Equation
2018, 2019, 2020 and 2021
Stockholders
Equity
Retained
Earnings
Assets
= Liabilities
Accounts Titles /
Event
Retained Earnings
Notes
Payable
Cash
Land
2018
1/1
1/1
%3D
12/31
12/31
Bal.
2019
Beg.…
Chapter 7 Solutions
Financial Accounting
Ch. 7 - Prob. 1YTCh. 7 - Prob. 2YTCh. 7 - Prob. 3YTCh. 7 - If a 1,000 bond is selling for 95.5, how much cash...Ch. 7 - Prob. 5YTCh. 7 - Prob. 6YTCh. 7 - Prob. 7YTCh. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - What is a mortgage?
Ch. 7 - Prob. 4QCh. 7 - Prob. 5QCh. 7 - Prob. 6QCh. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10QCh. 7 - Prob. 11QCh. 7 - Prob. 12QCh. 7 - Prob. 13QCh. 7 - Prob. 1MCQCh. 7 - All of the following are current liabilities...Ch. 7 - Prob. 3MCQCh. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - Prob. 6MCQCh. 7 - Prob. 7MCQCh. 7 - Prob. 8MCQCh. 7 - A 1,000 bond with a stated rate of 8% is issued...Ch. 7 - Prob. 10MCQCh. 7 - Prob. 1SEACh. 7 - Prob. 2SEACh. 7 - Prob. 3SEACh. 7 - Prob. 4SEACh. 7 - Account for mortgages. (LO 3). Nunez Company has...Ch. 7 - Prob. 6SEACh. 7 - Account for bonds. (LO 4). If a 1,000 bound is...Ch. 7 - Prob. 8SEACh. 7 - Prob. 9SEACh. 7 - Prob. 10SEACh. 7 - Prob. 11SEACh. 7 - Prob. 12SEBCh. 7 - Prob. 13SEBCh. 7 - Prob. 14SEBCh. 7 - Prob. 15SEBCh. 7 - Account for mortgages. (LO 3). Curtain Company...Ch. 7 - Prob. 17SEBCh. 7 - Prob. 18SEBCh. 7 - Prob. 19SEBCh. 7 - Prob. 20SEBCh. 7 - Prob. 21SEBCh. 7 - Prob. 22SEBCh. 7 - Prob. 23EACh. 7 - Prob. 24EACh. 7 - Prob. 25EACh. 7 - Prob. 26EACh. 7 - Account for long-term liabilities. (LO 3, 5)....Ch. 7 - Prob. 28EACh. 7 - Prob. 29EACh. 7 - Prob. 30EACh. 7 - Prob. 31EACh. 7 - Prob. 32EACh. 7 - Prob. 33EACh. 7 - Prob. 34EACh. 7 - Prob. 35EACh. 7 - Prob. 36EACh. 7 - Prob. 37EACh. 7 - Prob. 38EACh. 7 - Prob. 39EACh. 7 - Prob. 40EACh. 7 - Prob. 41EACh. 7 - Prob. 42EBCh. 7 - Prob. 43EBCh. 7 - Prob. 44EBCh. 7 - Prob. 45EBCh. 7 - Prob. 46EBCh. 7 - Prob. 47EBCh. 7 - Prob. 48EBCh. 7 - Account for long-term liabilities. (LO 3, 5). On...Ch. 7 - Prob. 50EBCh. 7 - Prob. 51EBCh. 7 - Prob. 52EBCh. 7 - Prob. 53EBCh. 7 - Prob. 54EBCh. 7 - Prob. 55EBCh. 7 - Prob. 56EBCh. 7 - Prob. 57EBCh. 7 - Prob. 58EBCh. 7 - Prepare an amortization schedule for a bond issued...Ch. 7 - Prob. 60EBCh. 7 - Account for current liabilities. (LO 1, 5). On...Ch. 7 - Prob. 62PACh. 7 - Prob. 63PACh. 7 - Prob. 64PACh. 7 - Prob. 65PACh. 7 - Prob. 66PACh. 7 - Prob. 67PBCh. 7 - Prob. 68PBCh. 7 - Prob. 69PBCh. 7 - Prob. 70PBCh. 7 - Prob. 71PBCh. 7 - Prob. 72PBCh. 7 - Prob. 1FSACh. 7 - Prob. 2FSACh. 7 - Prob. 3FSACh. 7 - Prob. 1IECh. 7 - Prob. 2IECh. 7 - Do owners or creditors have more claims on the...Ch. 7 - Prob. 4IE
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $42,000 face value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $12,121 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $22,260 cash per year. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the four years.arrow_forwardMission Corp. borrowed $25,000 cash on April 1, 2016, and signed a one-year 8%, interest-bearing note payable. The interest and principal are both due on March 31, 2017.What is the amount to be paid to the bank on March 31, 2017 for interest and principal (combined)?arrow_forwardRequired information [The following information applies to the questions displayed below.] On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $52,000 cash per year. Required a. Prepare an amortization schedule for the four-year period. (Round your answers to the nearest whole dollar amount.) BROWN CO. Amortization Schedule Principal Balance on January 1 Principal Balance End Cash Applied to Interest Applied to Principal Year Payments December 31 of Period 2018 2019 2020 2021arrow_forward
- On September 1, 2015, Newtown borrowed $250,000 from First National Bank, and signed a 9% note payable due in one year. Interest on the note is due at maturity. Required: Please show calculations Part a. Prepare the journal entry to record the borrowing transaction. Part b. Prepare the required adjusting entry on December 31, 2015. Part c. Prepare the journal entry to record the payment of the interest on September 1, 2016. Part d. Prepare the journal entry to record the payment of the note on September 1, 2016.arrow_forwardAssume that on December 1, 2010, your company borrowed $14,000 a portion of which is to be repaid each year on november 30. Specifically your company will make the following principal payments: 2011. $2,000; 2012, $3,000; 2013, $4,000; and 2014, $5,000. Show how this loan will be reported in the December 31, 2011 and 2010 balance sheets, assuming that principal payments will be made when required.arrow_forwardUse the information presented below in answering questions 11-15. On December 31, 2018, Tina Company, a financing institution lent P4,000,000 to Erika Corporation due three years after. The loan is supported by an 6% note receivable. Transaction costs incurred to originate the loan amounted to P100,000, P466,557 was chargeable to Erika as origination fees. Interest on the loan are collectible at the end of each year. The yield rate on the loan is 11%. Tina was able to collect interest as it became due at the end of 2019 and 2020. During 2021, however, due to Erika Corporation’s business deterioration and due to political instability and faltering global economy, the company was not able collect amounts due at the end of 2021. After reviewing all available evidence at December 31, 2021. Tina determined that it was probable that Erika would pay back only P2,500,000 is collectible as follows: December 31, 2023 0.5M December 31, 2024 1M December 31, 2025 0.6M December 31, 2026…arrow_forward
- On June 1, 2025, Thomas Company borrowed $42,000 from a bank on a 7%, 8-month note payable. On August 1, 2026, Thomas Company borrowed $63,000 from a bank on a 16%, 9-month note payable. Calculate the total amount of interest expense related to these two loans that Thomas Company would report in its 2026 income statement.arrow_forwardMcLaughlin Inc. operates with a June 30 year-end. During 2017, the following transactions occurred: January 1: Signed a one-year, 10% loan for $35,000. Interest and principal are to be paid at maturity. January 10: Signed a line of credit with Little Local Bank to establish a $560,000 line of credit. Interest of 9% will be charged on all borrowed funds. February 1: Issued a $28,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance. March 1: Borrowed $210,000 on the line of credit. June 1: Repaid $140,000 on the line of credit plus accrued interest. June 30: Made all necessary adjusting entries. August 1: Repaid the non-interest-bearing note. September 1: Borrowed $280,000 on the line of credit. November 1: Issued a three-month, 8%, $16,800 note in payment of an overdue open account. December 31: Repaid the one-year loan [from transaction (a)] plus accrued interest. can you help me write a balance/ income sheet…arrow_forwardColson Company has a line of credit with Federal Bank. Colson can borrow up to $457,500 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of 2018. Colson agreed to pay interest at an annual rate equal to 1.50 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 5.00 percent (3.50 percent + 1.50 percent) annual interest on $77,600 for the month of January. Month Amount Borrowedor (Repaid) Prime Rate forthe Month January $ 77,600 3.50 % February 121,600 2.50 March (21,800) 3.00 April 30,200 3.50 Compute the amount of interest that Colson will pay on the line of credit for the first four months of 2018.arrow_forward
- Colson Company has a line of credit with Federal Bank. Colson can borrow up to $457,500 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of 2018. Colson agreed to pay interest at an annual rate equal to 1.50 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 5.00 percent (3.50 percent + 1.50 percent) annual interest on $77,600 for the month of January. Month Amount Borrowedor (Repaid) Prime Rate forthe Month January $ 77,600 3.50 % February 121,600 2.50 March (21,800) 3.00 April 30,200 3.50 Compute the amount of Colson's liability at the end of each of the first four monthsarrow_forwardOn September 1, 2022, Accounts receivable in the amount of $900,000 were assigned as collateral to the Credit Suisse Finance Company by Gemini, Inc., as security for a loan of $750,000. The finance company assessed a 5% finance charge on the face amount of the loan, and the note bears interest at 9% per year. During the month of September, Gemini collected $425,000 on assigned accounts. This amount was remitted to Credit Suisse along with one month's interest on the note on October 1, 2022. Instructions Make all the journal entries for Gemini Inc. associated with the transfer of the accounts receivable, the loan, and the remittance to the Credit Suisse.arrow_forwardOn October 1, 2023, Parton Industries borrowed $12 million cash to provide working capital. The loan was made by Second Bank under a short-term line of credit. Parton issued an 8-month, “noninterest-bearing note.” 8% is the bank’s stated “discount rate.” Parton’s fiscal period is the calendar year. In Parton’s 2023 income statement interest expense for the note will be:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College