Note 1: On April 1 of the current year, Warren Corporation received a $40,000, 5 percent note from a customer in settlement of a $40,000 open account receivable. According to the terms, the principal of the note and interest are payable at the end of 12 months. Warrens fiscal year ends on December 31.

Note 2: On August 1 of the current year, to meet a cash shortage, Warren Corporation obtained a $40,000, 6 percent loan from a local bank. The principal of the note and interest expense are payable at the end of six months.

Required:

For the relevant transaction dates of each note, indicate the amounts and direction of effects on the elements of the statement of financial position and the statement of earnings. (Reminder: Assets = Liabilities + Shareholders equity; Revenues Expenses = Net earnings; and net earnings accounts are closed to retained earnings, a component of shareholders equity.) (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.)

Check my work 2 E4-10 Determining Financial Statement Effects of Interest on Two Notes LO4-1 10 points Note 1: On April 1 of the current year, Warren Corporation received a $40,000, 5 percent note from a customer in settlement of a $40,000 open account receivable. According to the terms, the principal of the note and interest are payable at the end of 12 months. Warren's fiscal year ends on December 31. Note 2: On August 1 of the current year, to meet a cash shortage, Warren Corporation obtained a $40,000, 6 percent loan from a local bank. The principal of the note and interest expense are payable at the end of six months. X 02:52:52 eBook Required: For the relevant transaction dates of each note, indicate the amounts and direction of effects on the elements of the statement of financial position and the statement of earnings. (Reminder: Assets = Liabilities + Shareholders' equity; Revenues - Expenses = Net earnings; and net earnings accounts are closed to retained earnings, a component of shareholders' equity.) (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) Print Statement of Earnings Statement of Financial Position Shareholders' Assets Liabilities Equity References Date Revenues Expenses Net Earnings Note 1: April 1 (current year) December 31 (current year) March 31 (next year) Note 2: August 1 (current year) December 31 (current year) January 31 (next year)