On July 1, 2020, Crane Ltd. borrowed $20,500 by signing a two-year, 4% note payable. The...
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On July 1, 2020, Crane Ltd. borrowed $20,500 by signing a two-year, 4% note payable. The note is payable in two annual instalments of $10,869 on June 30. The company records adjusting journal entries annually at year end on December 31. (a) Prepare an instalment payment schedule for the term of the note. (Round answers to the nearest whole dollar, e.g. 5,255.) Annual Interest Period July 1, 2020 June 30. 2021 June 30, 2022 Cash Payment 10869 10869 17 Interest Expense 820 418 147 Reduction of Principal 10049 10451 Principal B Question 2 of 6 Your answer is correct. Date 2020 Record (1) the receipt of the $20,500 cash and the issue of the note on July 1, 2020; (2) the accrual of interest on December 31, 2020; (3) the first payment on June 30, 2021; and (4) the accrual of interest on December 31, 2021. (Round answers to the nearest whole dollar, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) July 1 Dec. 31 2021 < June 30 V > Account Titles and Explanation Cash Notes Payable Interest Expense Interest Payable Interest Expense Interest Payable Debit 20500 410 410 0.67 / 1 410 Credit 20500 410 Question 2 of 6 Your answer is partially correct. Current Liabilities What amounts would Crane report as current and non-current in the liabilities section of its statement of financial position on December 31, 2020? (Round answers to the nearest whole dollar, e.g. 5,255.) Interest Payable > Non-Current Liabilities Notes Payable Crane Ltd. Statement of Financial Position (Partial) December 31, 2020 $ 0.67 / 1 410 ||| On July 1, 2020, Crane Ltd. borrowed $20,500 by signing a two-year, 4% note payable. The note is payable in two annual instalments of $10,869 on June 30. The company records adjusting journal entries annually at year end on December 31. (a) Prepare an instalment payment schedule for the term of the note. (Round answers to the nearest whole dollar, e.g. 5,255.) Annual Interest Period July 1, 2020 June 30. 2021 June 30, 2022 Cash Payment 10869 10869 17 Interest Expense 820 418 147 Reduction of Principal 10049 10451 Principal B Question 2 of 6 Your answer is correct. Date 2020 Record (1) the receipt of the $20,500 cash and the issue of the note on July 1, 2020; (2) the accrual of interest on December 31, 2020; (3) the first payment on June 30, 2021; and (4) the accrual of interest on December 31, 2021. (Round answers to the nearest whole dollar, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) July 1 Dec. 31 2021 < June 30 V > Account Titles and Explanation Cash Notes Payable Interest Expense Interest Payable Interest Expense Interest Payable Debit 20500 410 410 0.67 / 1 410 Credit 20500 410 Question 2 of 6 Your answer is partially correct. Current Liabilities What amounts would Crane report as current and non-current in the liabilities section of its statement of financial position on December 31, 2020? (Round answers to the nearest whole dollar, e.g. 5,255.) Interest Payable > Non-Current Liabilities Notes Payable Crane Ltd. Statement of Financial Position (Partial) December 31, 2020 $ 0.67 / 1 410 |||
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Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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