Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable....

 

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Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt Corporation builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt Corporation sales are on credit. As a result, Mitt Corporation often collects cash from its sales several months after Christmas. Assume on November 1, 2021, Mitt Corporation borrowed $7.3 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 10.00 percent payable at maturity. The accounting period ends December 31. Required: 1. Indicate the accounts, amounts, and effects of the (a) issuance of the note on November 1; (b) impact of the adjusting entry on December 31, 2021; and (c) the payment of the note and interest on April 30, 2022, on the accounting equation. (Do not round intermediate calculations. Enter your answers in whole dollars. Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.) Date a. November 1, 2021 Cash b. December 31, 2021 c. April 30, 2022 Cash Assets 7,300,000 (7,665,000) = = Answer is complete but not entirely correct. Liabilities Notes Payable (short-term) Interest Payable Interest Payable Notes Payable (short-term) 7,300,000 121,667 (121,667) (7,300,000) + 1 3 points activity to minance inventory and accounts receivanit. FuI retailers selling to Christmas shoppers. A large portion of Mitt ects cash from its sales several months after Christmas. Assume n Metropolitan Bank and signed a promissory note that matures The accounting period ends December 31. e note on November 1; (b) impact of the adjusting entry on April 30, 2022, on the accounting equation. (Do not round iter any decreases to assets, liabilities, or stockholders equity 000 00) = = X Answer is complete but not entirely correct. Liabilities Notes Payable (short-term) Interest Payable Interest Payable Notes Payable (short-term) 7,300,000 121,667 + (121,667) + (7,300,000) + + Stockholders' Equity Interest Expense Interest Expense (121,667) 24,334 x Return to question Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt Corporation builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt Corporation sales are on credit. As a result, Mitt Corporation often collects cash from its sales several months after Christmas. Assume on November 1, 2021, Mitt Corporation borrowed $7.3 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 10.00 percent payable at maturity. The accounting period ends December 31. Required: 1. Indicate the accounts, amounts, and effects of the (a) issuance of the note on November 1; (b) impact of the adjusting entry on December 31, 2021; and (c) the payment of the note and interest on April 30, 2022, on the accounting equation. (Do not round intermediate calculations. Enter your answers in whole dollars. Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.) Date a. November 1, 2021 Cash b. December 31, 2021 c. April 30, 2022 Cash Assets 7,300,000 (7,665,000) = = Answer is complete but not entirely correct. Liabilities Notes Payable (short-term) Interest Payable Interest Payable Notes Payable (short-term) 7,300,000 121,667 (121,667) (7,300,000) + 1 3 points activity to minance inventory and accounts receivanit. FuI retailers selling to Christmas shoppers. A large portion of Mitt ects cash from its sales several months after Christmas. Assume n Metropolitan Bank and signed a promissory note that matures The accounting period ends December 31. e note on November 1; (b) impact of the adjusting entry on April 30, 2022, on the accounting equation. (Do not round iter any decreases to assets, liabilities, or stockholders equity 000 00) = = X Answer is complete but not entirely correct. Liabilities Notes Payable (short-term) Interest Payable Interest Payable Notes Payable (short-term) 7,300,000 121,667 + (121,667) + (7,300,000) + + Stockholders' Equity Interest Expense Interest Expense (121,667) 24,334 x Return to question

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SOLUTION Lets correct the accounts amounts and effects for each transaction a November 1 2021 Issuan... View the full answer