Helen Parish started a design company on January 1, 2016. On April 1, 2016, Parish borrowed cash from a local bank by issuing a one-year $120,000 face value note with annual interest based on an 8 percent discount. During 2016, Parish provided services for $72,000 cash.
Answer the following questions.
a. What is the amount of total liabilities on the December 31, 2016, balance sheet?
b. What is the amount of net income on the 2016 income statement?
c. What is the amount of cash flow from operating activities on the 2016 statement of cash flows?
d. Provide the general journal entries necessary to record issuing the note on April 1, 2016; recognizing accrued interest on December 31, 2016; and repaying the loan on March 31, 2017.