Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On October 1, 2018, Highview Company borrows $214,000 on a three-year note that requires the company to pay 10% interest on March 31 and September

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
On October 1, 2018, Highview Company borrows $214,000 on a three-year note that requires the company to pay 10% interest on March 31 and September 30. On December 31, 2018, the adjusting entry to accrue interest on the note should debit: Multiple Choice Interest Payable and credit Interest Expense for $5,350. Interest Expense and credit Cash for $10,700. Interest Expense and credit Interest Payable for $5,350 Interest Expense and credit interest Payable for $10,700. On October 1, you borrow $215,000 in order to build a new facility. The loan is for 10 years, at 7% Interest, and semiannual interest payments are due each April and October The journal entry to record the issuance of the promissory note should: Multiple Choice debit Notes Payable for $215,000, debit Interest Expense for $15,050, credit Cash for $215,000, and credit Interest Payable for $15,050. debit Cash for $215,000 and credit Notes Payable for $215,000, debit Accrued Interest for $15,050 and credit Cash for $15,050. debit Cash for $215,000, debit Interest Expense for $15,050, credit Notes Payable for $215,000, and credit Interest Payable $15,050. The purchase of $125,000 of equipment by issuing a note would be reported: Multiple Choice as a $125,000 investing inflow, and a $125,000 financing outflow. as a $125,000 operating inflow, and a $125,000 financing outflow. as a $125,000 investing outflow, and a $125,000 financing inflow. in a supplementary schedule. Net income $ 15,500 Dividends paid to stockholders 3,600 Cash received from selling land 3,800 Cash received from new bank loan 9,800 Cash paid for principal on old bank loan 2,700 Cash paid to purchase office equipment 7,200 The company would report net cash provided by (used in) financing activities of: Multiple Choice $9,800 $3,500 $12,500 $(4750)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

23rd Edition

978-0324662962

More Books

Students also viewed these Accounting questions