Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Accounting for a long-term note payable On January 1, 2018, Lakeman-Fay signed a $1,500,000, 15-year, 7% note. The loan required Lakeman-Fay to make annual payments on December 31 of $100,000 principal plus interest. Requirements Journalize the issuance of the note on January 1, 2018. Journalize the first note payment on December 31, 2018.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Assume bonds payable are amortized using the
Accounting for a long-term note payable
On January 1, 2018, Lakeman-Fay signed a $1,500,000, 15-year, 7% note. The loan required Lakeman-Fay to make annual payments on December 31 of $100,000 principal plus interest.
Requirements
- Journalize the issuance of the note on January 1, 2018.
- Journalize the first note payment on December 31, 2018.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
