Problem 9-6: On June 20, 2016, Rolf Inc. borrowed $25,000 from its bank, signing an 8%, two-year note.Assuming that the bank charges simple interest on the note, prepare the journal entry Rolf will record on each of the following dates:December 31, 2016December 31, 2017June 30, 2018Assume instead that the bank charges 8% on the note, which is compounded semiannually. Prepare the necessary journal entries on the dates in part (1).How much additional interest expense will Rolf have in part (2) and in part (1)?

Solution: The journal entry Rolf will record on each of the following dates: 1) Assuming that the…

Answered: On June 20, 2016, Rolf Inc. borrowed…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.6P

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Problem 9-6: On June 20, 2016, Rolf Inc. borrowed $25,000 from its bank, signing an 8%, two-year note.

Assuming that the bank charges simple interest on the note, prepare the journal entry Rolf will record on each of the following dates:

December 31, 2016

December 31, 2017

June 30, 2018

Assume instead that the bank charges 8% on the note, which is compounded semiannually. Prepare the necessary journal entries on the dates in part (1).
How much additional interest expense will Rolf have in part (2) and in part (1)?

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