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Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $66,600 (face amount), one-year note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is an interest-bearing note? $ b. Provide the following entries and reporting amounts: 1. August 1 of Year 1, date of the loan. 2. December 31 of Year 1, adjusting entry. 3. July 31 of Year 2, payment of the note • Note: Round your answers to the nearest whole dollar. Account Name Date 1. Aug. 1, Year 1 2. Dec. 31, Year 1 3. July 31, Year 2 To record issue of note. Show Transcribed Text Current liabilities Note Payable To record year-end adjusting entry. To record payment of note. Balance Sheet, Dec. 31 c. What liability amounts should be shown on the December 31 of Year 1 Show Transcribed Text C. Current liabilities C C ➜ $ Balance Sheet, Dec. 31 Year 1 + S Year 1 Dr. Cr. Noninterest-Bearing Note d. Answer (a) and (c) assuming that the note is noninterest-bearing. Use the straight-line method to amortize any discount on note payable. a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note? $ c. What liability amounts should be shown on the December 31 of Year 1 balance sheet? ce sheet?

Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $66,600 (face amount), one-year note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is an interest-bearing note? $ b. Provide the following entries and reporting amounts: 1. August 1 of Year 1, date of the loan. 2. December 31 of Year 1, adjusting entry. 3. July 31 of Year 2, payment of the note • Note: Round your answers to the nearest whole dollar. Account Name Date 1. Aug. 1, Year 1 2. Dec. 31, Year 1 3. July 31, Year 2 To record issue of note. Show Transcribed Text Current liabilities Note Payable To record year-end adjusting entry. To record payment of note. Balance Sheet, Dec. 31 c. What liability amounts should be shown on the December 31 of Year 1 Show Transcribed Text C. Current liabilities C C ➜ $ Balance Sheet, Dec. 31 Year 1 + S Year 1 Dr. Cr. Noninterest-Bearing Note d. Answer (a) and (c) assuming that the note is noninterest-bearing. Use the straight-line method to amortize any discount on note payable. a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note? $ c. What liability amounts should be shown on the December 31 of Year 1 balance sheet? ce sheet?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
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Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $66,600 (face amount), one-year note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is an interest-bearing note? $ b. Provide the following entries and reporting amounts: 1. August 1 of Year 1, date of the loan. 2. December 31 of Year 1, adjusting entry. 3. July 31 of Year 2, payment of the note • Note: Round your ans Date 1. Aug. 1, Year 1 2. Dec. 31, Year 1 3. July 31, Year 2 Current liabilities Note Payable To record issue of note. Show Transcribed Text to the nearest whole dollar. Account Name To record year-end adjusting entry. Balance Sheet, Dec. 31 To record payment of note. 3 c. What liability amounts should be shown on the December 31 of Year 1 balance sheet? Show Transcribed Text c. Current liabilities → $ Balance Sheet, Dec. 31 Year 1 ÷ $ Dr. Year 1 Noninterest-Bearing Note d. Answer (a) and (c) assuming that the note is noninterest-bearing. Use the straight-line method to amortize any discount on note pay Cr. a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note? $ c. What liability amounts should be shown on the December 31 of Year 1 balance sheet?
Transcribed Image Text:Recording Entries for Interest-Bearing and Noninterest-Bearing Notes Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $66,600 (face amount), one-year note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. Interest-Bearing Note a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is an interest-bearing note? $ b. Provide the following entries and reporting amounts: 1. August 1 of Year 1, date of the loan. 2. December 31 of Year 1, adjusting entry. 3. July 31 of Year 2, payment of the note • Note: Round your ans Date 1. Aug. 1, Year 1 2. Dec. 31, Year 1 3. July 31, Year 2 Current liabilities Note Payable To record issue of note. Show Transcribed Text to the nearest whole dollar. Account Name To record year-end adjusting entry. Balance Sheet, Dec. 31 To record payment of note. 3 c. What liability amounts should be shown on the December 31 of Year 1 balance sheet? Show Transcribed Text c. Current liabilities → $ Balance Sheet, Dec. 31 Year 1 ÷ $ Dr. Year 1 Noninterest-Bearing Note d. Answer (a) and (c) assuming that the note is noninterest-bearing. Use the straight-line method to amortize any discount on note pay Cr. a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note? $ c. What liability amounts should be shown on the December 31 of Year 1 balance sheet?
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