Helen Parish started a design company on January 1, 2016. On April 1, 2016, Pari
ID: 2579991 • Letter: H
Question
Helen Parish started a design company on January 1, 2016. On April 1, 2016, Parish borrowed cash from a local bank by issuing a one-year $120,000 face value note with annual interest based on an 8 percent discount. During 2016, Parish provided services for $72,000 cash.
Answer the following questions. Record the events in T-accounts prior to answering the questions. (Select "1, 2, or 3" for the transactions in the order they take place.)
Helen Parish started a design company on January 1, 2016. On April 1, 2016, Parish borrowed cash from a local bank by issuing a one-year $120,000 face value note with annual interest based on an 8 percent discount. During 2016, Parish provided services for $72,000 cash.
Explanation / Answer
Cash Notes payable BB 0 BB 0 1) 110400 110,400 1) 9,600 9,600 2) 72,000 182,400 EB 182,400 EB 9,600 Service revenue discount on notes payable BB 0 BB 0 0 2) 72,000 72,000 1) 9600 9,600 3) 9,600 0 EB 72,000 EB 0 interest expense BB 0 3) 9,600 9,600 EB 9,600
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