On the first day of the fiscal year, Shiller Company borrowed $85,000 by giving a sevenyear,7% installment note to Soros Bank. The note requires annual payments of $15,772, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $5,950 and principal repayment of $9,822.a. Journalize the entries to record the following:1. Issued the installment note for cash on the first day of the fiscal year.2. Paid the first annual payment on the note.b. Explain how the notes payable would be reported on the balance sheet at the end of the first year.

Q: 1.Journalize the entries to record the foregoing transactions. Round all amounts to the nearest…

A:

Q: On 1 November, Year 1, Noble Co. borrowed P80,000 from South Bank and signed a 12%, six-month note…

A: Solution: Interest on note at maturity = P * R* T = P80,000 * 12%*6/12 = P4,800

Q: The December Trial Balance of Jane Corporation includes among others, the following: Long term…

A: Current liabilities: Current liabilities are short-term financial obligations of a company that are…

Q: The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar…

A: Given that  following details are the transactions of Winklevoss Inc. Journal entries it is the…

Q: Roth Company received from a customer a one-year, P500,000 note bearing an annual interest of 8%.…

A: Maturity value of note = Face value of note + interest = P500000 + 500000*8%*12/12 = P540000

Q: On January 1, 2021, Corvallis Carnivals borrows $17,000 to purchase a delivery truck by agreeing to…

A:

Q: Jacobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local bank onApril 1.…

A: Notes payable:   Notes Payable is a written promise to pay a certain amount on a future date, with…

Q: On the first day of its fiscal year, J Co. issued $1,000,000 of five-year, 8% bonds to finance the…

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Q: During the fiscal year ended December 31, Swanson Corporation engaged in the following transac-tions…

A: a) Notes to accounts: Interest expense for MGB= $12,000 × 12% × (45÷360) days…

Q: Coltrane Company has a $5,000 note payable that is paid in $1,000 installments over five years. How…

A:

Q: On January 1, 20x1, SAUCY BOLD Co. acquired a machine by issuing a 3-year, 3%, P4,800,000 note…

A: All amount are (P).

Q: The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar…

A: Bonds are the debt financial instrument issued by the company to raise the funds and in return…

Q: On January 1, Year 1, Beatie Company borrowed $400,000 cash from Central Bank by issuing a…

A: Amortization schedule of interest and principal payment for 5 periods is as under:

Q: During the year ended December 31, SC engaged in the following transactions involving notes payable.…

A: Journal entries is recording the of the transaction in the accounting journal in a chronological…

Q: On the first day of the current fiscal year, $200,000 of 10-year, 7% bonds, with interest payable…

A:

Q: Martinez Co. borrowed $69,589 on March 1 of the current year by signing a 60-day, 6%,…

A: Formula: Interest amount = Notes amount x Interest rate x Time period

Q: On the first day of the fiscal year, Shiller Company borrowed $85,000 by giving a seven-year, 7%…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: The December Trial Balance of Jane Corporation includes among others, the following: Long term…

A: CL stands for current liabilities which refers to the liabilities or obligations that are paid…

Q: On October 1, Eder Fabrication borrowed $84 million and issued a nine-month, 15% promissory note.…

A: Prepare the journal entry for the issuance of the note:

Q: The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar…

A: Year1       July        1   Cash                                       $69,552,279…

Q: On January 1, a company borrowed cash by issuing a $390,000, 4%, installment note to be paid in…

A: Compute amount of each installment as shown below:

Q: The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar…

A: 1.Journalize the entries to record the transactions.

Q: On November 1, 2014, EZ Products borrowed $48,000 on a 5%, 10-year note with annual installment…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: On the first day of its fiscal year, Chin Company issued $13,200,000 of five-year, 6% bonds to…

A: Bond financing is an instrument for borrowing the funds. The borrower has to pay a fixed amount of…

Q: Jacobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local bank on April…

A: The loan from bank has been taken against note payable in one year with interest payments paid…

Q: On October 1, Eder Fabrication borrowed $74 million and issued a nine-month promissory note.…

A:

Q: On the first day of its fiscal year, J Co. issued $1,000,000 of five-year, 8% bonds to finance the…

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Q: On January 1, 2021, a company borrowed $500,000 from a local bank by issuing an 8% note due in four…

A: Amortization schedule of loan: It can be defined as a table that shows the expense of interest,…

Q: On the first day of the fiscal year, a company, issues $65,000, 6%, five year installment notes that…

A: Notes payable is liability.

Q: Martinez Co. borrowed $69,589 on March 1 of the current year by signing a 60-day, 6%,…

A: Introduction: Journals: Each and every business transactions are to be recorded in journals. All the…

Q: On January 1, 2018, Nantucket Ferry borrowed $14,000,000 cash from BankOne and issued a…

A: Interest on Note = Principal amount x rate of interest x time = $14,000,000 x 6% x 1 years =…

Q: On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $68,500 face value,…

A: Cash Flow Statement - Under Cash Flow, there are three types of activities involved - Operating…

Q: At the beginning of April of the current year, Nickel Pork Corp. borrowed 1,000,000 for 1 yr from…

A: Part (1)   Date Particulars  Amount (Dr) Amount (Cr) 01-Apr Bank A/c Dr  880100     Finance…

Q: On the first day of the fiscal year, a company issues $89,000, 6%, five-year installment notes that…

A: Long-term notes payable: Long-term notes payable represent a legal and written promise made by the…

Q: On January 1, Year 1, Bryson Company obtained a $22,000, four-year, 12% installment note from…

A: Workings: Calculation of Interest: Year 1: 22000 x 12 % = 2640 Decrease in Notes payable = Notes…

Q: On the first day of the fiscal year, a company issues $65,000, 6%, five-year installment notes that…

A: a. Prepare the journal entry to record the issuance of the instalment notes.

Q: On January 1, 20X1, MWB, Inc. borrowed cash by issuing a $600,000, 6-year note that specified 6%…

A: Interest Rate - It is the percentage of amount charges by the lender for uses of the money given to…

Q: The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar…

A: a.

Q: The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar…

A: Bonds: These are financial instruments issued by the company to the public, to raise funds. Periodic…

Q: On January 1, a company borrowed cash by issuing a $300,000, 5%, installment note to be paid in…

A:

Q: On the first day of the fiscal year, a company issues $45,000, 8%, six-year installment notes that…

A: Note Payable: Note payable is an obligation of the business to pay to its creditors, in future for…

Q: On the first day of it's fiscal year, Ebert Co. issued $11,000,000 of 10-year, 7% bonds to finance…

A: An amortization schedule is a schedule showing the periodic debts, their interest expenses, the…

Q: Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years…

A: Compound Interest= P×1+rnnt-P

Q: On January 1, the first day of its fiscal year, Jacinto Company issued $18,400,000 of five-year, 12%…

A: Bonds refers to the debt instrument issued by a corporate company to raise funds. It is an asset for…

Q: On july 1, Shady creek resort borrowed 290,000 cash by signing a 10 year, 10% installment note…

A: Interest expense  is the amount of interest accrued during  period

Q: Boyd Company has a line of credit with State Bank. Boyd can borrow up to $500,000 at any time over…

A: Prepare an income statement:- BOYD COMPANY Income Statement For the year ended December…

Q: NYJ, Inc. borrowed $800,000 on July 1, 20X1, and signed a ten-month note bearing interest at 5%.…

A: Note payable is a financial instrument against which a payment needs to be made after a certain…

Q: On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value,…

A: The financial statement indicates the operational activities of the entity and its stand in the…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.