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Chapter 8 - Notes Payable (FAR6)

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Honeylet Sigesmundo
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33 views

Chapter 8 - Notes Payable (FAR6)

Uploaded by

Honeylet Sigesmundo
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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PROBLEM 1 (C8)

1. Cash 8,000,000
Note payable 8,000,000

2. Interest expense (8,000,000 x 12% x 2/12) 160,000


Interest payable 160,000

3. Interest expense (8,000,000 x 12% x 7/12) 560,000


Interest payable 160,000
Note payable 8,000,000
Cash 8,720,000

PROBLEM 2 (C8)

1. Cash 5,520,000
Discount on note payable 480,000
Note payable (600,000 x 12% * 8/12) 6,000,000

2. Interest expense 180,000


Discount on note payable (480,000 * 3/8) 180,000

3. Note payable 6,000,000


Discount on note payable 300,000
Carrying amount 5,700,000

4. Interest expense (480,000 X 5/8) 300,000


Discount on note payable 300,000

Note payable 6,000,000


Cash 6,000,000

5. Cash 6,000,000
Note payable 6,000,000
6. Interest expense (6,000,000 x 12% 3/12) 180,000
Accrued interest payable 180,000

7. Interest expense (6,000,000 x 12% x 5/12) 300,000


Note payable 6,000,000
Cash 6,300,000

PROBLEM 3 (C8)

1. Land 1,000,000
Cash 100,000
Note payable 900,000

2. Interest expense (10% x 900,000) 90,000


Accrued interest payable 90,000

3. Interest expense 99,000


Accrued interest payable (990,000*10%) 99,000

4. Note payable 900,000


Accrued interest payable 189,000
Cash 1,089,000

PROBLEM 4 (C8)

1. 1/1/2020 Accrued Interest Payable 252,000


Interest Expense (2,800,000 x 12% x 9/12) 252,000

4/1/2020 Interest expense 336,000


Note payable - bank 700,000
Cash 1,036,000

7/1/2020 Cash 1,774,000


Discount on note payable 226,000
Note payable - shareholder 2,000,000

12/31/2020 Interest expense 189,000


Accrued interest payable (2.1M x 12% x 9/12) 189,000

12/31/2020 Interest expense 113,000


Discount on note payable (226,000 x 1/2) 113,000

2. Note payable - bank 700,000


Note payable - shareholder 2,000,000
Discount on note payable -113,000 1,887,000
Accrued interest payable 189,000
Total Current Liabilities 2,776,000

3. Note payable - bank:


January 1 - April 1, 2020 (2,800,000 x 12% x 3/12) 84,000
April 1 - December 31, 2020 (2,100,000 x 12% x 9/12) 189,000 273,000
Note payable - shareholder:
Amortization of discount from July 1 - Dec. 31, 2020 (226,000 x 6/12) 113,000
Total interest expense 386,000

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