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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online