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Ch14 - Notes Payable Trax Co. issued for cash a 20,000, five years note bearing interest at 9% to Sport Corp on January 1, 2021.

Ch14 - Notes Payable

Trax Co. issued for cash a 20,000, five years note bearing interest at 9% to Sport Corp on January 1, 2021. The market rate of interest for a note of similar risk is 12%.

Instructions:

a. Calculate the note proceeds. (How much is the carrying value of the note)

b. Entries on date of issues

c. Prepare the schedule table of this note

d. Entries interest expense at the end of third year

e. Entries when maturity date.

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