ok E Hint Print eferences Exercise 7-7A (Algo) Effect of warranty obligations and payments on financial statements LO 7-4 The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,090. During the period a customer returned a product that cost $818 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase or a - for decrease. if the element is not affected, leave the cell blank. In the Cash Flow column. indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Not all cells will require entry.) Event Estimates Paid CHAIR COMPANY Horizontal Statements Model Assets Balance Sheet Liabilities Income Statement Statement of Stockholder's Equity Revenue Expense Net Income Cash Flow 2 8 points eBook Hint Exercise 7-9A (Algo) Financial statement effects of an installment note LO 7-5 Dan Dayle started a business by issuing an $94,000 face value note to First State Bank on January 1, Year 1. The note had an 6 percent annual rate of interest and a five-year term. Payments of $22,315 are to be made each December 31 for five years. Required a. What portion of the December 31, Year 1, payment is applied to interest expense and principal? b. What is the principal balance on January 1, Year 2? c. What portion of the December 31, Year 2, payment is applied to interest expense and principal? (Round your answers to the nearest dollar amount.) Print References a. Interest expense Principal b. Principal balance c. Interest expense Principal apter 7 homework 3 8 points eBook 10 10 Print Saved Exercise 7-17A (Algo) Determining cash receipts from bond issues LO 7-8, 7-9 Required Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Do not round intermediate calculations. Round your answers to nearest dollar amount.) Cash Proceeds Discount or Premium References 18. Pear, Inc. issued $197,000 of 10-year, 8 percent bonds at 102. b. Apple, Inc. issued $123,000 of five-year, 12 percent bonds at 97. c. Cherry Co. issued $187,000 of five-year, 6 percent bonds at 102 1/4. d. Grape, Inc. issued $55,000 of four-year, 8 percent bonds at 97, He