Notes Payable A business issued a 90 day, 7 note for $30,000 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 Statement of Cash Flows Balance Sheet Income Statement Assets Liabilities Stockholders' Equity No effect Accounts payable Notes payable No effect Statement of Cash Flows Income Statement No effect No effect 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 Statement of Cash Flows Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Cash Notes payable Retained earnings Statement of Cash Flows Income Statement Operating Interest expense

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Question: Notes Payable A business issued a 90-day, 7% note for $30,000 to a creditor on account. Illustrate the effects on the accounts and financial statements

Notes Payable

A business issued a 90-day, 7% note for $30,000 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.

Statement of Cash Flows	Balance Sheet								Income Statement
	Assets	=	Liabilities			+	Stockholders' Equity
	No effect	=	Accounts payable	+	Notes payable	+		No effect

Statement of Cash Flows								Income Statement
No effect								No effect

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.

Statement of Cash Flows	Balance Sheet						Income Statement
	Assets	=	Liabilities	+	Stockholders' Equity
	Cash	=	Notes payable	+		Retained earnings

Statement of Cash Flows						Income Statement
Operating						Interest expense

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