ACC304Week_3Chapter_11HW

ACC304Week_3Chapter_11HW - Week 3 Chapter 11 EXERCISE 11-2...

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Week 3 Chapter 11 EXERCISE 11-2 (15 minutes) (a) Sept. 1 Purchases. ............................................. 50,000 Accounts Payable. ....................... 50,000 Oct. 1 Accounts Payable. ................................ 50,000 Notes Payable. ............................. 50,000 Oct. 1 Cash. ...................................................... 50,000 Discount on Notes Payable. ................. 6,000 Notes Payable. ............................. 56,000 (b) Dec. 31 Interest Expense. .................................. 1,500 Interest Payable. .......................... 1,500 ($50,000 X 12% X 3/12) Dec. 31 Interest Expense. .................................. 1,500 Discount on Notes Payable. ....... 1,500 ($6,000 X 3/12) (c) (1) Note payable $50,000 Interest payable 1,500 $51,500 (2) Note payable $56,000 Less discount ($6,000 – $1,500) 4,500 $51,500
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EXERCISE 11-3 (15-20 minutes) (a)Valuation account relating to the long-term liability, bonds payable (sometimes referred to as an adjunct account). The $3,000 would continue to be reported as long-term. (b)Current liability if current assets are used to satisfy the debt.
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ACC304Week_3Chapter_11HW - Week 3 Chapter 11 EXERCISE 11-2...

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