On January 1, 2014, Mixon Co. borrowed cash from First City Bank by issuing a $9
ID: 2492276 • Letter: O
Question
On January 1, 2014, Mixon Co. borrowed cash from First City Bank by issuing a $90,000 face value, three-year term note that had a 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $34,295 that include both interest and principal on December 31 of each year. Mixon used the proceeds from the loan to purchase land that generated rental revenues of $45,000 cash per year.
Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. Select "NA" if there is no effect on the "Accounts Titles for Retained Earnings".)
.Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. Select "NA" if there is no effect on the "Accounts Titles for Retained Earnings".)
MIXON CO Effect of Events on the Accounting Equation 2014, 2015 and 2016 = Liabilities + Stockholders Equity Assets Accounts Titles for RetainedRetained Earnings Date Notes+ Payable Earnings Cash + Land = 2014 12/31 12/31 Bal 2015 Beg. bal 12/31 12/31 End. bal 2016 Beg. bal 12/31 12/31 End. balExplanation / Answer
The completed table is given below:
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Notes:
The amortization table is given below:
Assets Liabilities Stockholder Equity Date Cash + Land = Notes Payable + Retained Earnings Accounts Title for Retained Earnings 2014 01/01 90,000 + - = 90,000 + - 01/01 -90,000 + 90,000 = - + - 12/31 - + - = 6,300 + -6,300 Interest Payable 12/31 45,000 + - = - + 45,000 Rental Revenue 12/31 -34,295 + - = -34,295 + - Bal. $10,705 $90,000 $62,005 $38,700 2015 Beg. Bal. 10,705 + 90,000 = 62,005 + 38,700 12/31 - + - = 4,340 + -4,340 Interest Payable 12/31 45,000 + - = - + 45,000 Rental Revenue 12/31 -34,295 + - = -34,295 + - End. Bal $21,410 $90,000 $32,050 $79,360 2016 Beg. Bal. 21,410 + 90,000 = 31,430 + 79,360 12/31 - + - = 2,245 + -2,245 Interest Payable 12/31 45,000 + - = - + 45,000 Rental Revenue 12/31 -34,295 + - = -34,295 + - End. Bal. $32,115 $90,000 - $122,115Related Questions
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