Question: On August 1, 2010, Christy Co. treasurer signed a note promising to pay $121,500 on December 31, 2010. The proceeds of the note were $114,000.00
On August 1, 2010, Christy Co. treasurer signed a note promising to pay $121,500 on December 31, 2010. The proceeds of the note were $114,000.00
rev: 05-10-2011
19.value:
15.00 points
You did NOT receive full credit for this question in previous attempt.
Requirement 1:
Calculate the discount rate used by the lender. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Discount rate %
rev: 05-10-2011
eBook Linkreferencesprevious attempt
20.value:
15.00 points
You did NOT receive full credit for this question in previous attempt.
Requirement 2:
Calculate the effective interest rate (APR) on the loan. (Round your answer to 1 decimal place.Omit the "%" sign in your response.)
Effective interest rate%
rev: 05-10-2011
eBook Linkreferencesprevious attempt
21.value:
15.00 points
You did NOT receive full credit for this question in previous attempt:
Requirement 3:
(a)
Prepare the horizontal model to show the effects of signing the note and the receipt of the cash proceeds on August 1, 2010. (+ for increase, - for decrease and NE for no effect).
Balance Sheet Income Statement
Assets= Liabilities+Owners’ Equity←Net income= Revenues– Expenses
(b)
Prepare the horizontal model to show the effects of recording interest expense for the month of September. (+ for increase, - for decrease and NE for no effect).
Balance Sheet Income Statement
Assets= Liabilities+Owners’ Equity←Net income= Revenues– Expenses
(c)
Prepare the horizontal model to show the effects of repaying the note on December 31, 2010. (+ for increase, - for decrease and NE for no effect).
Balance Sheet Income Statement
Assets= Liabilities+Owners’ Equity←Net income= Revenues– Expenses
rev: 11_17_2011
eBook Linkreferencesprevious attempt
22.value:
15.00 points
You did NOT receive full credit for this question in previous attempt.
Requirement 3:
(d)
Record the journal entry to show the effects of signing the note and the receipt of the cash proceeds on August 1, 2010. (Omit the "$" sign in your response.)
Date General JournalDebitCredit
August 1,2010
(e)
Record the journal entry to show the effects of recording interest expense for the month of September. (Omit the "$" sign in your response.)
Date General JournalDebit Credit
September 30, 2010
(f)
Record the journal entry to show the effects of repaying the note on December 31, 2010. (Omit the "$" sign in your response.)
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