Problemon january 1 2013 a company borrowed 50000 cash by, Ask an Expert

Accounting

Problem:

On January 1, 2013, a company borrowed $50,000 cash by signing a 7% installment note that is to be repaid with five annual end-of year payments, the first of which is due on December 31,2013.

Required:

Question 1: Prepare the company's gernal journal entry to record the note's issuance.

Question 2: Assume that the annual payments are to consist of accrued interest plus equal amounts of principal. Prepare the general journal entries to record the first and second installment payments.

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165815

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