Question

A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1,...

A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1, 2018, is shown as follows.

Accounting
Period		 Principal
Balance January 1		 Cash
Payment		 Applied to
Interest		 Applied to
Principal
2018 $ 133,000 $ 34,193 $ 11,970 $ 22,223
2019 110,777 34,193 9,970 24,223
2020 86,554 34,193 7,790 26,403

  1. Using a financial statements model like the one shown, record the appropriate amounts for the following two events: (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), financing activities (FA), or if there is no effect, leave the cell blank.)

  1. (1) January 1, 2018, issue of the note payable.

  2. (2) December 31, 2018, payment on the note payable.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Event Date Balance Sheet Income Statement Cash flow
Asset = Liabilities + Equity Revenue - Expense = Net income
( 1 ) January 1,2018           133,000 = 133,000 130,000 FA
( 2 ) December 31,2018             -34,193 =     -22,223 + -11,970    11,970 =        -11,970 11,970 OA
22,223 FA
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1,...
A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1, 2018, is shown as follows. Accounting Period Principal Balance January 1 Cash Payment Applied to Interest Applied to Principal 2018 $ 133,000 $ 34,193 $ 11,970 $ 22,223 2019 110,777 34,193 9,970 24,223 2020 86,554 34,193 7,790 26,403 What is the amount of interest expense on this loan for 2021? (Round your answers to the nearest whole dollar amount.)
Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events...
Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: Earned $1,900 of cash revenue. Borrowed $3,000 cash from the bank. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1, had a one-year term and an 8 percent annual interest rate. What is the amount of interest expense in Year 1? What amount of cash was...
Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events...
Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $1,200 of cash revenue. 2. Borrowed $2,100 cash from the bank. 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1, had a one-year term and an 6 percent annual interest rate. Required: a. What is the amount of interest payable at December 31,...
Stuart Company issued bonds with a $154,000 face value on January 1, Year 1. The bonds...
Stuart Company issued bonds with a $154,000 face value on January 1, Year 1. The bonds had a 9 percent stated rate of interest and a five-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 102. The straight-line method is used for amortization. Required a. Use a financial statements model like the one shown next to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31,...
The Platte Corporation issues a 5-year note payable on January 1, 2016 for $5,000. The interest...
The Platte Corporation issues a 5-year note payable on January 1, 2016 for $5,000. The interest rate is 5% and the annual payment of $1,156, due each December 31, includes both interest and principal. Which of the following shows the effect of the December 31, 2016 payment? Assets = Liab + Equity Revenue - Expense = Net Inc Cash Flow A. (1,156) = (1,156) + NA NA - NA = NA (1,156)FA B. (1,156) = (906) + (250) NA -...
Diaz Company issued bonds with a $127,000 face value on January 1, Year 1. The bonds...
Diaz Company issued bonds with a $127,000 face value on January 1, Year 1. The bonds had a 7 percent stated rate of interest and a 10-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 97. The straight-line method is used for amortization. Requireda. Use a financial statements model like the one shown next to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year...
Statement of Cash Flows Amount OA, IA, or FA (for extra credit only) Accounts payable increase...
Statement of Cash Flows Amount OA, IA, or FA (for extra credit only) Accounts payable increase $ 9,000 Accounts receivable increase     4,000 Salaries payable decrease     3,000 Amortization expense     6,000 Cash balance, January 1    22,000 Cash balance, December 31    15,000 Cash paid as dividends    29,000 Cash paid to purchase land    90,000 Cash paid to retire bonds payable at par    60,000 Cash received from issuance of common stock    35,000 Cash received from sale...
On January 1, 2020, Randal Inc. issued a 5% note payable to First Bank for $80,000...
On January 1, 2020, Randal Inc. issued a 5% note payable to First Bank for $80,000 with 10 equal annual payments (principal plus interest) with the first payment due December 31, 2020. Indicate the net impact on the financing activities section of the statement of cash flows for 2020. Select one: a. Net cash inflow of $73,640 b. Net cash outflow of $10,360 c. Net cash inflow of $69,640 d. Net cash inflow of $76,000
Rainey Enterprises loaned $50,000 to Small Co. on June 1, 2018, for one year at 9...
Rainey Enterprises loaned $50,000 to Small Co. on June 1, 2018, for one year at 9 percent interest. Required Show the effects of the following transactions in a horizontal statements. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). For any element not affected by the event, leave the cell blank. (Not every cell will require entry. Do not round intermediate calculations. Enter any decreases to...
Entries for Installment Note Transactions On January 1, Year 1, Luzak Company issued a $32,000, 4-year,...
Entries for Installment Note Transactions On January 1, Year 1, Luzak Company issued a $32,000, 4-year, 11% installment note to McGee Bank. The note requires annual payments of $10,314, beginning on December 31, Year 1. Journalize the entries to record the following. Year 1 Jan. 1 Issued the notes for cash at its face amount. Dec. 31 Paid the annual payment on the note, which consisted of interest of $3,520 and principal of $6,794. Year 4 Dec. 31 Paid the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT