On April 1st, 2022, the Edmonton Manufacturing Company (EMC) negotiates a loan from the bank for $50,000 with a term of five years, bearing an interest rate of 10%. The loan will require a payment against the principal of $10,000 per year plus interest on March 31st. The EMC has a December 31st year end and prepares adjusting entries and financial statements only once a year. JOURNAL ENTRY APRIL 1ST Prepare the journal entry to record the cash receipt from the loan on April 1st, 2022. JOURNAL ENTRY DECEMBER 31ST Prepare the adjusting entry on December 31st, 2022. How much of the principal is paid on March 31st, 2023? What is the amount of the interest expense that should be recorded on March 31, 2023 for the current year? What is the amount of the interest payable that should be debited on March 31, 2023 for the current year.

Answer rating: 100% (QA)

Solution 1 Lets go through each part of the scenario April 1st 2022 Cash Receipt from Loan Journal E... View the full answer