Notes Payable

A business issued a $90-$day, $9\%$ note for $$55,000$ to a creditor for an accounts payable. 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$.$ Illustrete the effects on the accounts and financial statements of recording the issuance of the note.

Financial Statement Effects

Assets Balance Sheet

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.

Financial Statement Effects

Balance Sheet

Assets

Liabilities

Stockholders' Equity