On August 1, 2010, Christy Co. treasurer signed a note promising to pay $121,500 on December 31, 2010. The proceeds of the note were $114,000.00rev: 05-10-201119.value:15.00 pointsYou did NOT receive full credit for this question in previous attempt.
Requirement 1:
Calculate the discount rate used by the lender. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)Discount rate %
rev: 05-10-2011eBook Linkreferencesprevious attempt20.value:15.00 pointsYou did NOT receive full credit for this question in previous attempt.
Requirement 2:
Calculate the effective interest rate (APR) on the loan. (Round your answer to 1 decimal place.Omit the "%" sign in your response.)Effective interest rate%rev: 05-10-2011eBook Linkreferencesprevious attempt21.value:15.00 pointsYou did NOT receive full credit for this question in previous attempt:
Requirement 3:
(a)Prepare the horizontal model to show the effects of signing the note and the receipt of the cash proceeds on August 1, 2010. (+ for increase, - for decrease and NE for no effect).
Balance Sheet Income Statement
Assets = Liabilities + Owners Equity Net income = Revenues Expenses
(b)Prepare the horizontal model to show the effects of recording interest expense for the month of September. (+ for increase, - for decrease and NE for no effect). Balance Sheet Income Statement
Assets = Liabilities + Owners Equity Net income = Revenues Expenses
(c)Prepare the horizontal model to show the effects of repaying the note on December 31, 2010. (+ for increase, - for decrease and NE for no effect).
Balance Sheet Income Statement
Assets = Liabilities + Owners Equity Net income = Revenues Expenses
rev: 11_17_2011eBook Link references previous attempt22.value:15.00 pointsYou did NOT receive full credit for this question in previous attempt.
Requirement 3:
(d)Record the journal entry to show the effects of signing the note and the receipt of the cash proceeds on August 1, 2010. (Omit the "$" sign in your response.)Date General Journal Debit CreditAugust 1,2010
(e)Record the journal entry to show the effects of recording interest expense for the month of September. (Omit the "$" sign in your response.)Date General Journal Debit CreditSeptember 30, 2010
(f)Record the journal entry to show the effects of repaying the note on December 31, 2010. (Omit the "$" sign in your response.)