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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Notes payable Obj.

A business issued a 90-day. 7% note lor $30.000 to .1 creditor on account. Illustrate the effects on ihe accounts and financial statements of recording (a) the issuance of the noie and (b) the payment of the note at mtaturity, including interest.

To determine

Concept Introduction:

Notes payable:

Notes payable is a liability which represents the loan taken by the business of the business transactions. A note payable can be issued by a debtor to its creditor for the liability of payments for issuing supplies.

To Indicate:

The effect of the issuance and payment of note payable on accounts and financial statements

Explanation

Notes payable is a liability which represents the loan taken by the business of the business transactions. A note payable can be issued by a debtor to its creditor for the liability of payments for issuing supplies.

The effect of the issuance and payment of note payable on accounts and financial statements is explained as follows:

    Account Account TypeFinancial Statement Amount Increase or Decrease
    Issuance:
    Cash AssetBalance sheet $ 30,000 Increase
    Note PayableLiabilityBala...

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