A business issued a 60-day, 9% note for $61,000 to a creditor on account. Illustrate the effects on the accounts and financial statements of recording (a) the issuance of the note and (b) the payment of the note at maturity, including interest. 

If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

a. Illustrate the effects on the accounts and financial statements of recording the issuance of the note.

 

b. Illustrate the effects on the accounts and financial statements of recording the payment of the note at maturity, including interest. Assume a 360-day year. If required, round interest expense to the nearest whole number.

 

Transcribed Image Text:

Balance Sheet Statement of Cash Flows Income Statement Assets = Liabilities Stockholders' Equity Statement of Cash Flows Income Statement No effect No effect Balance Sheet Statement of Cash Flows Income Statement Assets = Liabilities Stockholders' Equity Statement of Cash Flows Income Statement No effect No effect

Answer rating: 100% (QA)

Solution Part A NOTES PAYABLE Accounts payable Notes payable 61000 61000 Bal sheet Assets SE CFS I... View the full answer