accthw2

# accthw2 - d Date Description Debi t Credi t 31-Dec-09...

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ACCT115-501 Assignment #2 Exercise 4.8 a. Total interest expense over the life of the note is: \$120,000 × .09 × 6/12 = \$5,400 The monthly interest expense is: \$5,400 / 6 = \$900 b. The liability to the bank at December 31, 2009 is: \$120,000 + \$120,000*.09*2/12 = \$121,800 c. Date Description Debit Credit 31-Oct- 09 Cash \$120,00 0 Notes Payable \$120,00 0 Obtain from bank a six-month loan with interest at 9% a year.
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Unformatted text preview: d. Date Description Debi t Credi t 31-Dec-09 Interest Expense \$900 Interest Payable \$900 To accrue interest expense for December on note payable \$120,000 *.09 *1/12 = \$900 e. The liability to the bank at March 31, 2009 is: \$120,000 + \$120,000*.09*5/12 = \$124,500...
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