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On September 1 , 2 0 2 4 , the company borrows $ 1 , 0 0 0 , 0 0 0 cash from the

On September 1,2024, the company borrows $1,000,000 cash from the bank to expand operations. The company
signs a 1 year, 6% promissory note. The companys year-end is December 31.
6. How was the loan classified on the companys December 31,2024 balance sheet?
A. Current liability
B. Long term liability
C. Note disclosure only
D. Stockholders Equity
7. How was the loan classified on the companys December 31,2024 statement of cash flow?
A. Operating activity
B. Investing activity
C. Financing activity
D. Not shown on the statement of cash flows
8. $_________ How much interest should be accrued on December 31,2024(assume no previous entry was
recorded for interest on the loan)?
9. $______________When the note is paid at maturity (August 31,2025) how much cash is paid to the bank?
10. $_________ When the note is paid at maturity in the second accounting year, how much does net income
decrease?

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