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Question
A company borrows $20,000 with 8% interest on October 1, 2015. This amount plus interest is due on September 30, 2016. Record the adjusting entry on December 31, 2015.
Answer
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Carrying Value 1/1/15 $194,758 6/30/15
$7,000
$7,790
$790
195,548 12/31/15
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a. Increase assets.
b. Increase liabilities.
c. Increase assets and liabilities.
d. No effect on total assets and total liabilities.
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d. None of these is correct.
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When using the equity method to account for an investment, cash dividends received by the investor from the investee should be recorded:
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b. As an increase in the Investments account.
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d. Future value of an annuity
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_____ A series of equal periodic payments.
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790 Income Statement Data Sales
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77 Tax Expense
32 Net Income
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23 Notes Payable (difference)
557.32 Cash (monthly payment) 704.55 (to record the second monthly payment)
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00 Notes Payable (difference)
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