On January 1, Luther Co. issued a $1,000,000, 5 year, 8% installment note payable with payments of $250,456 principal plus interest due on January 1 of each year for the next 5 years.

Required:

1. Prepare the adjusting journal entry at December 31 to accrue interest for the year. Refer to the Chart of Accounts for exact wording of account titles.

2. Show the account(s) and amount(s) and where it will appear on a multi-step income statement prepared on December 31.

3. Show the account(s) and amount(s) and where they will appear on a classified balance sheet prepared on December 31.

Figured out the rest just not sure if this Partial Balance Sheet is correct

Transcribed Image Text:

1 2 Note Payable-Current Portion Interest Payable 3 4 5 Note Payable Partial Balance Sheet Current Liabilities: Long-Term Liabilities: $250,456.00 80,000.00 $330,456.00 1 2 Note Payable-Current Portion Interest Payable 3 4 5 Note Payable Partial Balance Sheet Current Liabilities: Long-Term Liabilities: $250,456.00 80,000.00 $330,456.00

Answer rating: 100% (QA)

1 Journal entry is as under The calculation of the interst of lease is ... View the full answer