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On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $49,000 face value, four-year term note that had an 8
On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $49,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $14,794 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $24,010 cash per year.
O Required information Effect of Events on the Accounting Equation Year 1, Year 2, Year 3 and Year 4 Assets Liabilities + Stockholders' Equity Notes Retained Land Payable Earnings Event Account Titles for Retained Earnings Cash + Year 1 1/1 49,000+ 1/1 + + 12/31 12/31 +++++ ++ Bal. 49,000 + 0 = 0 ++++ ++++ 0 0 Year 2 Beg. bal. 12/31 12/31 End. bal. Year 3 Beg. bal. 12/31 12/31 End, bal. Year 4 Beg. bal. 12/31 12/31 End. bal. ++++ ++++ 0 = 0 ++++ ++++ 0 Required information [The following information applies to the questions displayed below.) On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $49,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $14,794 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $24,010 cash per year. b. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Account Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)Step by Step Solution
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