Identify & analyze the effect of the payment of principal & interest
Identify & analyze the effect of the payment of principal & interest.
Notes Payable and Interest
On July 1, 2017, Kamer’s Trinkets borrowed $38,000 from the bank. Kamer signed a ten-month, 8% promissory note for the entire amount. Kamer’s uses a calendar year-end.
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines
Order Paper NowRequired:
1. Identify and analyze the effect of the issuance of the promissory note.
Activity |
Financing |
Accounts |
Cash Increase, Notes Payable Increase |
Statement(s) |
Balance Sheet only |
Feedback
How does this entry affect the accounting equation?
If a financial statement item is not affected, select “No Entry” and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.
Balance Sheet | Income Statement | |||||||||||||
Stockholders’ | Net | |||||||||||||
Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
Cash |
|
Notes Payable |
|
|
No Entry |
|
No Entry |
|
|
Feedback
Correct
2. Identify and analyze the effect of any adjustments needed at year-end.
Activity |
Operating |
Accounts |
Interest Payable Increase, Interest Expense Increase |
Statement(s) |
Balance Sheet and Income Statement |
Feedback
How does this entry affect the accounting equation?
If a financial statement item is not affected, select “No Entry” and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Use months in calculation. Do not round intermediate calculations. If required, round your final answer to the nearest dollar.
Balance Sheet | Income Statement | |||||||||||||
Stockholders’ | Net | |||||||||||||
Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
No Entry |
|
Interest Payable |
|
|
No Entry |
|
Interest Expense |
|
|
Feedback
3. Identify and analyze the effect of the payment of principal and interest.
Activity |
Financing |
Accounts |
Cash Decrease, Notes Payable Decrease, Interest Payable Decrease, Interest Expense Increase |
Statement(s) |
Balance Sheet and Income Statement |
Feedback
How does this entry affect the accounting equation?
If a financial statement item is not affected, select “No Entry” and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Use months in calculation. Do not round intermediate calculations. If required, round your final answer to the nearest dollar.
Balance Sheet | Income Statement | |||||||||||||
Stockholders’ | Net | |||||||||||||
Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
Cash |
|
Notes Payable |
|
|
No Entry |
|
Interest Expense |
|
|
|||||
No Entry |
|
Interest Payable |
|
|
No Entry |
|
No Entry |
|
|
Identify & analyze the effect of the payment of principal & interest