On the first day of the fiscal year, Harris Company borrowed $65,000 by giving a

Question

On the first day of the fiscal year, Harris Company borrowed $65,000 by giving a 10-year, 6% installment note to Cuba Bank. The note requires annual payments of $8,832, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $3,900 and principal repayment of $4,932.

Journalize the entries to record the following:

Issued the installment note for cash on the first day of the fiscal year.

Journalize
Paid the first annual payment on the note. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".

b. Explain how the notes payable would be reported on the balance sheet at the end of the first year.

Explanation / Answer

journal entry.....................................debit..................credit 1) Cash...............................................65000 Account payable........................................................65000 2) Cash......................................................................4932 Account payable..................................4932 Cash.......................................................................3900 Tax expense......................................3900 b) notes or account payable has balance left = 65000-4932 = 60068

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.