Question
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.4 million cash on October 1, 2024, to provide working
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.4 million cash on October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Precision Castparts has a December 31 year-end.
Required:
- How will the issuance of the note payable affect the financial statements of Precision Castparts on October 1, 2024?
- How will the accrued interest on the note payable affect the financial statements of Precision Castparts at the end of the fiscal year (December 31, 2024)?
- How will the repayment of the note and interest on September 30, 2025, affect the financial statements of Precision Castparts?
Note: Amounts to be deducted should be indicated by a minus sign. Enter your answers in dollars, not in millions (i.e., $5.5 million should be entered as $5,500,000).
Complete this question by entering your answers in the tabs below. :s of Precision Castparts
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