Alaska Inc. borrowed $16,000 by signing a one-year note payable on November 1, 2020. The note bears interest at 10% and interest is payable upon maturity of the note. a. Record this financing transaction on November 1, 2020. b. Record the year-end adjusting entry required on December 31, 2020. Hint: Prorate the annual interest of 10% for two months. c. Record the entry to repay the note on November 1, 2021. Note: Round your answers to the nearest dollar. For example, enter 50 for 50.49 and enter 51 for 50.5
Alaska Inc. borrowed $16,000 by signing a one-year note payable on November 1, 2020. The note bears interest at 10% and interest is payable upon maturity of the note. a. Record this financing transaction on November 1, 2020. b. Record the year-end adjusting entry required on December 31, 2020. Hint: Prorate the annual interest of 10% for two months. c. Record the entry to repay the note on November 1, 2021. Note: Round your answers to the nearest dollar. For example, enter 50 for 50.49 and enter 51 for 50.5
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter8: Current And Contingent Liabilities
Section: Chapter Questions
Problem 75APSA: Note Payable and Accrued Interest Fairbome Company borrowed $60,000 on an 8%, interest-bearing note...
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Recording Accrued Interest Expense
Alaska Inc. borrowed $16,000 by signing a one-year note payable on November 1, 2020. The note bears interest at 10% and interest is payable upon maturity of the note.
a. Record this financing transaction on November 1, 2020.
b. Record the year-end
c. Record the entry to repay the note on November 1, 2021.
Note: Round your answers to the nearest dollar. For example, enter 50 for 50.49 and enter 51 for 50.5
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