On Jul 1, 2009 Gerdin Company borrowed $100,000. The company signed a note payab

Question

On Jul 1, 2009 Gerdin Company borrowed $100,000. The company signed a note payable with interest at 6% per year. The note and interest are due on December 31, 2009 after 6 months. On December 31, 2009, Goode paid $103,000 to settle the debt in full. Assuming no Accruals for interest have been made during the year, transaction analysis of the $103,000 cash payment on December 31, 2009, should reflect the following: Will this increase or decrease the following and by how much?

Assets, Liabilities, and stockholder’s equity how?

Explanation / Answer

In $

0

*****

3000

Notes payble 100000 Interest expense 3000         Cash 103000

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