Bryant Company sells a wide range of inventories, which are initially purchased

Question

Bryant Company sells a wide range of inventories, which are initially purchased on account. Occasionally,a short-term note payable is used to obtain cash for current use. The following transactions were selected from those occurring during the year a. On January 10, purchased merchandise on credit for $24,000. The company uses a perpetual inventory system. b. On March 1, borrowed $52,000 cash from City Bank and signed a promissory note with a face amount of $52,000, due at the end of six months, accruing interest at an annual rate of 9.50 percent, payable at maturity Required: 1. For each of the transactions, indicate the accounts, amounts, and effects on the accounting equation (Enter any decreases to account balances with a minus sign.) Date Assets Liabilities Stockholders' Equity January 10 March 1 2. What amount of cash is paid on the maturity date of the note? Cash Paid

Explanation / Answer

1)

2)

cash paid at maturity = Principal +accrued interest

     =[52000+ [52000*.095*6/12]

     52000 + 2470

       54470

3)

Asset = Liabilities + Equity 1 +24000 +24000 2 +52000 +52000

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