On June 30, 2022, Making Waves, LLC, purchased land for $400,000 and a building for $560,000, paying $360,000 cash and issuing a 5% note for the balance secured by a mortgage on the property. The terms of the note provide for 20 semi-annual payments of $30,000 on the principal plus the accrued interest from the date of the preceding payment. What journal entry would be required to record the first installment on December 31? Explain the answers below. How are these the answers? Show how to calculate it. Debit 5% Notes Payable, $30,000 Debit Interest Expense, $15,000 Credit Cash, $45,000
On June 30, 2022, Making Waves, LLC, purchased land for $400,000 and a building for $560,000, paying $360,000 cash and issuing a 5% note for the balance secured by a mortgage on the property. The terms of the note provide for 20 semi-annual payments of $30,000 on the principal plus the accrued interest from the date of the preceding payment. What journal entry would be required to record the first installment on December 31? Explain the answers below. How are these the answers? Show how to calculate it. Debit 5% Notes Payable, $30,000 Debit Interest Expense, $15,000 Credit Cash, $45,000
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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On June 30, 2022, Making Waves, LLC, purchased land for $400,000 and a building for $560,000, paying $360,000 cash and issuing a 5% note for the balance secured by a mortgage on the property. The terms of the note provide for 20 semi-annual payments of $30,000 on the principal plus the accrued interest from the date of the preceding payment.
What
Explain the answers below. How are these the answers? Show how to calculate it.
Debit 5% Notes Payable, $30,000
Debit Interest Expense, $15,000
Credit Cash, $45,000
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