Notes and Interest Glencoe Inc operates with a June 30 year end During 2014, the following transactions occurred Required 1 Identify and analyze the effect of these transactions Do not round intermediate calculations If required, round your final answers to the nearest dollar a January 1 Signed a one year, 10 loan for $25,000 Interest and principal are to be paid at maturity Activity Select your answer OperatingInvestingFinancingCorrect 1 of Item 1 Accounts Select your answer Cash Increase, Notes Payable IncreaseCash Increase, Notes Payable DecreaseCash Decrease, Notes Payable IncreaseCash Decrease, Notes Payable DecreaseCorrect 2 of Item 1 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 1 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashInterest PayableNotes PayableNotes ReceivableNo EntryCorrect 1 of Item 2 Select your answer Accounts PayableAccounts ReceivableCashNotes PayableNotes ReceivableNo EntryCorrect 3 of Item 2 Select your answer Accounts PayableAccounts ReceivableCashNotes PayableNotes ReceivableNo EntryCorrect 6 of Item 2 Select your answer Accounts PayableCashInterest PayableInterest ExpenseNotes PayableNo EntryCorrect 8 of Item 2 b January 10 Signed a line of credit with Little Local Bank to establish a $400,000 line of credit Interest of 9 will be charged on all borrowed funds How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 3 Select your answer Accounts PayableCashInterest PayableNotes PayableNotes ReceivableNo EntryCorrect 3 of Item 3 Select your answer Accounts PayableCashInterest ReceivableNotes PayableNotes ReceivableNo EntryCorrect 6 of Item 3 Select your answer Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 8 of Item 3 c February 1 Issued a $20,000 non interest bearing, six month note to pay for a new machine Interest on the note, at 12 , was deducted in advance Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 4 Accounts Select your answer Equipment Increase, Discount on Notes Payable Increase, Notes Payable IncreaseEquipment Increase, Discount on Notes Payable Increase, Notes Payable DecreaseEquipment Decrease, Discount on Notes Payable Increase, Notes Payable IncreaseEquipment Decrease, Discount on Notes Payable Increase, Notes Payable DecreaseCorrect 2 of Item 4 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 4 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Remember if a contra account is increased , it will have the effect of decreasing the corresponding financial statement item Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashEquipmentEquipment ExpenseInterest ExpenseNo EntryCorrect 1 of Item 5 Select your answer CashInterest ExpenseNotes PayablePremium on Notes PayablePrepaid InterestNo EntryCorrect 3 of Item 5 Select your answer Accounts ReceivableInterest ExpenseNotes PayablePrepaid InterestPremium on Notes PayableNo EntryCorrect 6 of Item 5 Select your answer CashEquipmentEquipment ExpenseInterest ExpenseNotes ReceivableNo EntryCorrect 8 of Item 5 Select your answer CashInterest ExpenseNotes PayablePremium on Notes PayablePrepaid InterestNo EntryCorrect 11 of Item 5 Select your answer CashDiscount on Notes PayableEquipmentInterest ExpenseNotes ReceivableNo EntryCorrect 13 of Item 5 Select your answer Discount on Notes PayableEquipmentInterest ExpenseNotes ReceivablePrepaid InterestNo EntryCorrect 16 of Item 5 Select your answer Accounts PayableInterest ExpenseNotes PayablePrepaid InterestPremium on Notes PayableNo EntryCorrect 18 of Item 5 d March 1 Borrowed $150,000 on the line of credit Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 6 Accounts Select your answer Cash Increase, Loan Payable IncreaseCash Increase, Loan Payable DecreaseCash Decrease, Loan Payable IncreaseCash Decrease, Loan Payable DecreaseCorrect 2 of Item 6 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 6 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 1 of Item 7 Select your answer Accounts PayableCashInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 3 of Item 7 Select your answer Accounts PayableInterest ExpenseInterest PayableLoan PayableLoan ReceivableNo EntryCorrect 6 of Item 7 Select your answer CashAccounts PayableInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 8 of Item 7 e June 1 Repaid $100,000 on the line of credit plus accrued interest Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 8 Accounts Select your answer Cash Increase, Loan Payable Decrease, Interest Expense IncreaseCash Increase, Loan Payable Decrease, Interest Expense DecreaseCash Decrease, Loan Payable Decrease, Interest Expense IncreaseCash Decrease, Loan Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 8 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 8 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashInterest ExpenseInterest PayableLoan PayableNo EntryCorrect 1 of Item 9 Select your answer Accounts PayableCashInterest PayableLoan PayableLoan ReceivableNo EntryCorrect 3 of Item 9 Select your answer Accounts PayableCashInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 6 of Item 9 Select your answer CashInterest ExpenseInterest PayableLoan PayableLoan ReceivableNo EntryCorrect 8 of Item 9 f June 30 Made all necessary adjusting entries The adjustment for interest owed Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 10 Accounts Select your answer Interest Payable Increase, Interest Expense IncreaseInterest Payable Increase, Interest Expense DecreaseInterest Payable Decrease, Interest Expense IncreaseInterest Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 10 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 10 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 1 of Item 11 Select your answer Accounts PayableCashInterest ExpenseInterest PayablePrepaid InterestNo EntryCorrect 3 of Item 11 Select your answer Accounts PayableAccounts ReceivableCashInterest ExpenseInterest PayableNo EntryCorrect 6 of Item 11 Select your answer CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 8 of Item 11 The adjustment to amortize the discount on the note Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 12 Accounts Select your answer Interest Expense Increase, Discount on Notes Payable IncreaseInterest Expense Increase, Discount on Notes Payable DecreaseInterest Expense Decrease, Discount on Notes Payable IncreaseInterest Expense Decrease, Discount on Notes Payable DecreaseCorrect 2 of Item 12 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 12 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Remember if a contra account is increased , it will have the effect of decreasing the corresponding financial statement item Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableAccounts ReceivableCashInterest ExpenseInterest PayableNo EntryCorrect 1 of Item 13 Select your answer CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 3 of Item 13 Select your answer CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 6 of Item 13 Select your answer Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 8 of Item 13 g August 1 Repaid the non interest bearing note Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 14 Accounts Select your answer Cash Increase, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense IncreaseCash Increase, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense DecreaseCash Decrease, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense IncreaseCash Decrease, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 14 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 14 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer CashInterest ExpenseInterest PayableInterest RevenueNotes PayableNo EntryCorrect 1 of Item 15 Select your answer CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes ReceivableNo EntryCorrect 3 of Item 15 Select your answer CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 6 of Item 15 Select your answer Accounts ReceivableCashDiscount on Notes PayableInterest ExpenseNotes ReceivableNo EntryCorrect 8 of Item 15 Select your answer Accounts PayableAccounts ReceivableDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 11 of Item 15 Select your answer CashInterest ExpenseInterest PayableInterest RevenueNotes PayableNo EntryCorrect 13 of Item 15 Select your answer CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 16 of Item 15 Select your answer Accounts ReceivableDiscount on Notes PayableInterest RevenueNotes PayableNotes ReceivableNo EntryCorrect 18 of Item 15 h September 1 Borrowed $200,000 on the line of credit Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 16 Accounts Select your answer Cash Increase, Notes Payable IncreaseCash Increase, Notes Payable DecreaseCash Decrease, Notes Payable IncreaseCash Decrease, Notes Payable DecreaseCorrect 2 of Item 16 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 16 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashDiscount on Notes PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 17 Select your answer Accounts ReceivableCashDiscount on Notes PayableNotes PayableNotes ReceivableNo EntryCorrect 3 of Item 17 Select your answer Accounts ReceivableCashDiscount on Notes PayableNotes PayableNotes ReceivableNo EntryCorrect 6 of Item 17 Select your answer Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 8 of Item 17 i November 1 Issued a three month, 8 , $12,000 note in payment of an overdue open account Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 18 Accounts Select your answer Accounts Payable Increase, Notes Payable IncreaseAccounts Payable Increase, Notes Payable DecreaseAccounts Payable Decrease, Notes Payable IncreaseAccounts Payable Decrease, Notes Payable DecreaseCorrect 2 of Item 18 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 18 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashDiscount on Notes PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 19 Select your answer Accounts PayableCashDiscount on Notes PayableInterest RevenueNotes ReceivableNo EntryCorrect 3 of Item 19 Select your answer Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes ReceivableNo EntryCorrect 6 of Item 19 Select your answer Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 8 of Item 19 Select your answer Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 11 of Item 19 Select your answer CashDiscount on Notes PayableInterest ReceivableNotes PayableNotes ReceivableNo EntryCorrect 13 of Item 19 Select your answer Accounts PayableCashDiscount on Notes PayableInterest RevenueNotes ReceivableNo EntryCorrect 16 of Item 19 Select your answer Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 18 of Item 19 j December 31 Repaid the one year loan from transaction (a) plus accrued interest Activity Select your answer OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 20 Accounts Select your answer Cash Increase, Notes Payable Decrease, Interest Payable Decrease, Interest Expense IncreaseCash Increase, Notes Payable Decrease, Interest Payable Decrease, Interest Expense DecreaseCash Decrease, Notes Payable Decrease, Interest Payable Decrease, Interest Expense IncreaseCash Decrease, Notes Payable Decrease, Interest Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 20 Statement(s) Select your answer Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 20 How does this entry affect the accounting equation If a financial statement item is not affected, select No Entry and leave the amount box blank If the effect on a financial statement item is negative, i e, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Revenues Expenses Net Income Select your answer Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 21 Select your answer Accounts ReceivableCashInterest ExpenseInterest PayableInterest RevenueNo EntryCorrect 3 of Item 21 Select your answer Accounts ReceivableCashInterest ExpenseInterest RevenueNotes ReceivableNo EntryCorrect 6 of Item 21 Select your answer Accounts PayableCashInterest ExpenseInterest PayableNotes ReceivableNo EntryCorrect 8 of Item 21 Select your answer Accounts PayableInterest PayableLoss on NoteNotes PayableNotes ReceivableNo EntryCorrect 11 of Item 21 Select your answer Accounts PayableCashInterest ExpenseNotes PayableNotes ReceivableNo EntryCorrect 13 of Item 21 Select your answer Accounts ReceivableCashInterest ExpenseInterest PayableNotes ReceivableNo EntryCorrect 16 of Item 21 Select your answer Accounts PayableCashInterest PayableInterest ReceivableNotes ReceivableNo EntryCorrect 18 of Item 21 2 As of December 31, which notes are outstanding How much interest is due on each Do not round intermediate calculations If required, round your final answers to the nearest dollar Outstanding Debt Principal Balance Interest Payable Line of credit $ $ 8 Note $ $ a January 1 Signed a one year, 10 loan for $25,000 Interest and principal are to be paid at maturity b January 10 Signed a line of credit with Little Local Bank to establish a $400,000 line of credit Interest of 9 will be charged on all borrowed funds c February 1 Issued a S20,000 non interest bearing, six month note to pay for a new machine Interest on the note, at 12 , was deducted in advance d March 1 Borrowed $150,000 on the line of credit e June 1 Repaid $100,000 on the line of credit plus accrued interest June 30 Made all necessary adjusting entries g August 1 Repaid the non interest bearing note h September 1 Borrowed $200,000 on the line of credit i November l Issued a three month, 8 , $12,000 note in payment of an overdue open account December 31 Repaid the one year loan from transaction (a)l plus accrued interest

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Question: Notes and Interest Glencoe Inc. operates with a June 30 year-end. During 2014, the following transactions occurred: Required: 1. Identify and analyze the effect of

Notes and Interest

Glencoe Inc. operates with a June 30 year-end. During 2014, the following transactions occurred:

Required:

1. Identify and analyze the effect of these transactions. Do not round intermediate calculations. If required, round your final answers to the nearest dollar.

a. January 1: Signed a one-year, 10% loan for $25,000. Interest and principal are to be paid at maturity.

Activity	- Select your answer -OperatingInvestingFinancingCorrect 1 of Item 1
Accounts	- Select your answer -Cash Increase, Notes Payable IncreaseCash Increase, Notes Payable DecreaseCash Decrease, Notes Payable IncreaseCash Decrease, Notes Payable DecreaseCorrect 2 of Item 1
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 1

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashInterest PayableNotes PayableNotes ReceivableNo EntryCorrect 1 of Item 2

- Select your answer -Accounts PayableAccounts ReceivableCashNotes PayableNotes ReceivableNo EntryCorrect 3 of Item 2

- Select your answer -Accounts PayableAccounts ReceivableCashNotes PayableNotes ReceivableNo EntryCorrect 6 of Item 2

- Select your answer -Accounts PayableCashInterest PayableInterest ExpenseNotes PayableNo EntryCorrect 8 of Item 2

b. January 10: Signed a line of credit with Little Local Bank to establish a $400,000 line of credit. Interest of 9% will be charged on all borrowed funds.

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 3

- Select your answer -Accounts PayableCashInterest PayableNotes PayableNotes ReceivableNo EntryCorrect 3 of Item 3

- Select your answer -Accounts PayableCashInterest ReceivableNotes PayableNotes ReceivableNo EntryCorrect 6 of Item 3

- Select your answer -Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 8 of Item 3

c. February 1: Issued a $20,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance.

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 4
Accounts	- Select your answer -Equipment Increase, Discount on Notes Payable Increase, Notes Payable IncreaseEquipment Increase, Discount on Notes Payable Increase, Notes Payable DecreaseEquipment Decrease, Discount on Notes Payable Increase, Notes Payable IncreaseEquipment Decrease, Discount on Notes Payable Increase, Notes Payable DecreaseCorrect 2 of Item 4
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 4

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item.

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashEquipmentEquipment ExpenseInterest ExpenseNo EntryCorrect 1 of Item 5

- Select your answer -CashInterest ExpenseNotes PayablePremium on Notes PayablePrepaid InterestNo EntryCorrect 3 of Item 5

- Select your answer -Accounts ReceivableInterest ExpenseNotes PayablePrepaid InterestPremium on Notes PayableNo EntryCorrect 6 of Item 5

- Select your answer -CashEquipmentEquipment ExpenseInterest ExpenseNotes ReceivableNo EntryCorrect 8 of Item 5

- Select your answer -CashInterest ExpenseNotes PayablePremium on Notes PayablePrepaid InterestNo EntryCorrect 11 of Item 5

- Select your answer -CashDiscount on Notes PayableEquipmentInterest ExpenseNotes ReceivableNo EntryCorrect 13 of Item 5

- Select your answer -Discount on Notes PayableEquipmentInterest ExpenseNotes ReceivablePrepaid InterestNo EntryCorrect 16 of Item 5

- Select your answer -Accounts PayableInterest ExpenseNotes PayablePrepaid InterestPremium on Notes PayableNo EntryCorrect 18 of Item 5

d. March 1: Borrowed $150,000 on the line of credit.

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 6
Accounts	- Select your answer -Cash Increase, Loan Payable IncreaseCash Increase, Loan Payable DecreaseCash Decrease, Loan Payable IncreaseCash Decrease, Loan Payable DecreaseCorrect 2 of Item 6
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 6

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 1 of Item 7

- Select your answer -Accounts PayableCashInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 3 of Item 7

- Select your answer -Accounts PayableInterest ExpenseInterest PayableLoan PayableLoan ReceivableNo EntryCorrect 6 of Item 7

- Select your answer -CashAccounts PayableInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 8 of Item 7

e. June 1: Repaid $100,000 on the line of credit plus accrued interest.

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 8
Accounts	- Select your answer -Cash Increase, Loan Payable Decrease, Interest Expense IncreaseCash Increase, Loan Payable Decrease, Interest Expense DecreaseCash Decrease, Loan Payable Decrease, Interest Expense IncreaseCash Decrease, Loan Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 8
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 8

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashInterest ExpenseInterest PayableLoan PayableNo EntryCorrect 1 of Item 9

- Select your answer -Accounts PayableCashInterest PayableLoan PayableLoan ReceivableNo EntryCorrect 3 of Item 9

- Select your answer -Accounts PayableCashInterest ExpenseLoan PayableLoan ReceivableNo EntryCorrect 6 of Item 9

- Select your answer -CashInterest ExpenseInterest PayableLoan PayableLoan ReceivableNo EntryCorrect 8 of Item 9

f. June 30: Made all necessary adjusting entries.

The adjustment for interest owed:

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 10
Accounts	- Select your answer -Interest Payable Increase, Interest Expense IncreaseInterest Payable Increase, Interest Expense DecreaseInterest Payable Decrease, Interest Expense IncreaseInterest Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 10
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 10

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 1 of Item 11

- Select your answer -Accounts PayableCashInterest ExpenseInterest PayablePrepaid InterestNo EntryCorrect 3 of Item 11

- Select your answer -Accounts PayableAccounts ReceivableCashInterest ExpenseInterest PayableNo EntryCorrect 6 of Item 11

- Select your answer -CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 8 of Item 11

The adjustment to amortize the discount on the note:

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 12
Accounts	- Select your answer -Interest Expense Increase, Discount on Notes Payable IncreaseInterest Expense Increase, Discount on Notes Payable DecreaseInterest Expense Decrease, Discount on Notes Payable IncreaseInterest Expense Decrease, Discount on Notes Payable DecreaseCorrect 2 of Item 12
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 12

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableAccounts ReceivableCashInterest ExpenseInterest PayableNo EntryCorrect 1 of Item 13

- Select your answer -CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 3 of Item 13

- Select your answer -CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 6 of Item 13

- Select your answer -Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 8 of Item 13

g. August 1: Repaid the non-interest-bearing note.

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 14
Accounts	- Select your answer -Cash Increase, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense IncreaseCash Increase, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense DecreaseCash Decrease, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense IncreaseCash Decrease, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 14
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 14

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -CashInterest ExpenseInterest PayableInterest RevenueNotes PayableNo EntryCorrect 1 of Item 15

- Select your answer -CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes ReceivableNo EntryCorrect 3 of Item 15

- Select your answer -CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 6 of Item 15

- Select your answer -Accounts ReceivableCashDiscount on Notes PayableInterest ExpenseNotes ReceivableNo EntryCorrect 8 of Item 15

- Select your answer -Accounts PayableAccounts ReceivableDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 11 of Item 15

- Select your answer -CashInterest ExpenseInterest PayableInterest RevenueNotes PayableNo EntryCorrect 13 of Item 15

- Select your answer -CashDiscount on Notes PayableInterest ExpenseInterest PayableNotes PayableNo EntryCorrect 16 of Item 15

- Select your answer -Accounts ReceivableDiscount on Notes PayableInterest RevenueNotes PayableNotes ReceivableNo EntryCorrect 18 of Item 15

h. September 1: Borrowed $200,000 on the line of credit.

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 16
Accounts	- Select your answer -Cash Increase, Notes Payable IncreaseCash Increase, Notes Payable DecreaseCash Decrease, Notes Payable IncreaseCash Decrease, Notes Payable DecreaseCorrect 2 of Item 16
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 16

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 17

- Select your answer -Accounts ReceivableCashDiscount on Notes PayableNotes PayableNotes ReceivableNo EntryCorrect 3 of Item 17

- Select your answer -Accounts ReceivableCashDiscount on Notes PayableNotes PayableNotes ReceivableNo EntryCorrect 6 of Item 17

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 8 of Item 17

i. November 1: Issued a three-month, 8%, $12,000 note in payment of an overdue open account.

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 18
Accounts	- Select your answer -Accounts Payable Increase, Notes Payable IncreaseAccounts Payable Increase, Notes Payable DecreaseAccounts Payable Decrease, Notes Payable IncreaseAccounts Payable Decrease, Notes Payable DecreaseCorrect 2 of Item 18
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 18

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 19

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest RevenueNotes ReceivableNo EntryCorrect 3 of Item 19

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes ReceivableNo EntryCorrect 6 of Item 19

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 8 of Item 19

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 11 of Item 19

- Select your answer -CashDiscount on Notes PayableInterest ReceivableNotes PayableNotes ReceivableNo EntryCorrect 13 of Item 19

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest RevenueNotes ReceivableNo EntryCorrect 16 of Item 19

- Select your answer -Accounts PayableCashDiscount on Notes PayableInterest ExpenseNotes PayableNo EntryCorrect 18 of Item 19

j. December 31: Repaid the one-year loan [from transaction (a)] plus accrued interest.

Activity	- Select your answer -OperatingInvestingFinancingFinancing and InvestingCorrect 1 of Item 20
Accounts	- Select your answer -Cash Increase, Notes Payable Decrease, Interest Payable Decrease, Interest Expense IncreaseCash Increase, Notes Payable Decrease, Interest Payable Decrease, Interest Expense DecreaseCash Decrease, Notes Payable Decrease, Interest Payable Decrease, Interest Expense IncreaseCash Decrease, Notes Payable Decrease, Interest Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 20
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 20

Balance Sheet

Income Statement

Assets

Liabilities

Stockholders' Equity

Revenues

Expenses

Net Income

- Select your answer -Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNo EntryCorrect 1 of Item 21

- Select your answer -Accounts ReceivableCashInterest ExpenseInterest PayableInterest RevenueNo EntryCorrect 3 of Item 21

- Select your answer -Accounts ReceivableCashInterest ExpenseInterest RevenueNotes ReceivableNo EntryCorrect 6 of Item 21

- Select your answer -Accounts PayableCashInterest ExpenseInterest PayableNotes ReceivableNo EntryCorrect 8 of Item 21

- Select your answer -Accounts PayableInterest PayableLoss on NoteNotes PayableNotes ReceivableNo EntryCorrect 11 of Item 21

- Select your answer -Accounts PayableCashInterest ExpenseNotes PayableNotes ReceivableNo EntryCorrect 13 of Item 21

- Select your answer -Accounts ReceivableCashInterest ExpenseInterest PayableNotes ReceivableNo EntryCorrect 16 of Item 21

- Select your answer -Accounts PayableCashInterest PayableInterest ReceivableNotes ReceivableNo EntryCorrect 18 of Item 21

2. As of December 31, which notes are outstanding? How much interest is due on each? Do not round intermediate calculations. If required, round your final answers to the nearest dollar.

Outstanding Debt	Principal Balance	Interest Payable
Line of credit	$	$
8% Note	$	$

a. January 1: Signed a one-year, 10% loan for $25,000. Interest and principal are to be paid at maturity b. January 10: Signed a line of credit with Little Local Bank to establish a $400,000 line of credit. Interest of 9% will be charged on all borrowed funds. c. February 1: Issued a S20,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance. d. March 1: Borrowed $150,000 on the line of credit. e. June 1: Repaid $100,000 on the line of credit plus accrued interest. June 30: Made all necessary adjusting entries. g. August 1: Repaid the non-interest-bearing note. h. September 1: Borrowed $200,000 on the line of credit. i. November l: Issued a three-month, 8%, $12,000 note in payment of an overdue open account. December 31: Repaid the one-year loan [from transaction (a)l plus accrued interest

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