Hetty Grey has just approached a venture capitalist for financing for her new business venture, the development
Question:
Hetty Grey has just approached a venture capitalist for financing for her new business venture, the development of a local ski hill. On July 1, 2021, Hetty was loaned $150,000 at an annual interest rate of 7%. The loan is repayable over 5 years in annual installments of $36,584, principal and interest, due each June 30. The first payment is due June 30, 2022. Hetty uses the effective-interest method for amortizing debt. Her ski hill company’s year-end will be June 30.
Instructions
a. Prepare an amortization schedule for the 5 years, 2021–2026. (Round all calculations to the nearest dollar.)
b. Prepare all journal entries for Hetty Grey for the first 2 fiscal years ended June 30, 2022, and June 30, 2023.
c. Show the balance sheet presentation of the note payable as of June 30, 2023.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119493631
9th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso