If a company has a long-term loan that has only two yearsremaining until it matures, how is it reported on the balancesheet ( a ) this year and ( b ) next year?
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If a company has a long-term loan that has only two years
remaining until it matures, how is it reported on the balance
sheet ( a ) this year and ( b ) next year?
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- Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. Interest and principal will be collected when the loan matures one year from the issue date. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end?
- Accounts payable, in general, is classified as current when and only: When it is expected to be settled within the operating cycle or one year, whichever is longer When it is expected to be settled within the operating cycle. When it is expected to be settled within the operating cycle or one year, whichever is shorter. When it is expected to be settled within one year.Which of the items are normally classified as current liabilities for a company that has a oneyearoperating cycle? Note payable maturing in 2 years.Debt due within one year is considered: A . current.
- For the loan amount, interest rate, annual payment, and loan term shown in the following table, calculate the annual interest paid each year over the term of the loan, assuming that the payments are made at the end of each year. amount interest rate annual payment term $44,000 9% $13,581.42 4 years The portion of the payment that is applied to interest in year 1-4 isWhich of the items are normally classified as current liabilities for a company that has a oneyearoperating cycle? Accounts payable due in 11 months.On January 1 of this year, Diorite borrows $100,000 with a 5%, 9-month loan. Interest is due at maturity. What entry will Diorite make on September 30 to repay the loan, assuming no ajusting entries after June 30?
- Namekus Company has the following three loans payable scheduled to be repaid in February of next year. The company’s accounting year ends on December 31.A. The company intends to repay Loan 1 for P100,000 when it comes due in February. In the following October, the company intends to get a new loan for P80,000 from the same bank.B. The company intends to refinance Loan 2 for P150,000 when it comes due in February. The refinancing agreement, for P180,000, will be signed in April, after the financial statements for this year have been authorized for issue.C. The company intends to refinance Loan 3 for P200,000 before it comes due in February. The actual refinancing, for P175,000, took place in January, before the financial statements for this year have been authorized for issue. As of December 31 of this year, the total noncurrent liabilities to be reported on the company’s statement of financial position should be:Which of the items are normally classified as current liabilities for a company that has a oneyearoperating cycle? Note payable due in 18 months.A business loan worth $1,000,000 is to be repaid quarterly in 2 years. The interest rate is 10% converted quarterly. a.) How much is the quarterly payment? b.) How much is the total amount paid and total interest? c.) Construct an amortization schedule.