Question
On January 1, the first day of the fiscal year, Shiller Company borrowed $96,000 by giving a seven-year, 4% installment note to Soros Bank. The
On January 1, the first day of the fiscal year, Shiller Company borrowed $96,000 by giving a seven-year, 4% installment note to Soros Bank. The note requires annual payments of $15,995, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $3,840 and principal repayment of $12,155.
Required:
a. | Journalize the entries to record the following transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
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b. | Explain how the notes payable would be reported on the balance sheet at the end of the first year. |
Chart of Accounts
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Shiller Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Journal
a. Journalize the entries to record the selected transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
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JOURNAL
ACCOUNTING EQUATION
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