Question
Berlin AG started business one year ago and reported the following account balances sheet on 31 December 2019 as followed. Cash 100,000 PPE 500,000 Note
Berlin AG started business one year ago and reported the following account balances sheet on 31 December 2019 as followed.
Cash 100,000 PPE 500,000
Note payable 120,000
Equity 480,000
Berlin sold 100,000, five-year, 9% bonds on January 1, 2020, for 103,992.71. Interest is payable each January 1. The Note Payable is due on June 30, 2020, with a 10% interest rate.
Show the financial statement impact and prepare the journal entry on December 31, 2020, if bond Discount is amortized using the straigh-line amortization (show your calculation). Prepare the liability and equity section of the Berlin AG on December 31, 2020, based on this information (Show your calculation).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started