Question
On March 31, 2016, Gophers United Inc. signed a $50,000 note payable. It is due in 5 annual payments of $10,000 plus 4% interest beginning
On March 31, 2016, Gophers United Inc. signed a $50,000 note payable. It is due in 5 annual payments of $10,000 plus 4% interest beginning March 31, 2017.
Prepare the journal entry to record Gopher United Incs note payable.
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Prepare the journal entry on December 31, 2016 to accrue interest.
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Properly classify the note and interest payable at December 31, 2016
Gophers United Inc. Balance Sheet (partial) December 31, 2016
Current Liabilities
Long-term Liabilities
How much cash will be paid on March 31, 2017?
Record the journal entry for the principal and interest payment on March 31, 2017.
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Prepare the journal entry on December 31, 2017 to accrue interest.
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Properly classify the note and interest payable at December 31, 2017
Gophers United Inc. Balance Sheet (partial) December 31, 2017
Current Liabilities
Long-term Liabilities
How much interest expense related to the note payable will appear on the Income Statement for the year ended Dec. 31, 2017?
How much cash will be paid on March 31, 2018?
Record the journal entry for the principal and interest payment on March 31, 2018.
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Prepare the amortization table for the 5-year repayment schedule.
| Date | Annual payment | Annual interest expense | Principal Reduction | Carrying Value |
| 3/31/2016 | ||||
| 3/31/2017 |
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| 3/31/2018 |
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| 3/31/2019 |
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| 3/31/2020 |
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| 3/31/2021 |
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| Total | ||||
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Financial Accounting Tools For Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
4th Edition
0471730513, 978-0471730514
