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Untitled Document11 - for a piece of equipment The interest...

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Notes Payable Notes payable  represent obligations to banks or other creditors based on formal  written agreements. A specific interest rate is usually identified in the agreement.  Following the matching principle, if interest is owed but has not been paid, it is  accrued prior to the preparation of the financial statements. Assume The Flower  Lady signed a $10,000 three-year note with interest of 10% on July 1 in exchange 
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Unformatted text preview: for a piece of equipment. The interest is due and payable quarterly on Oct. 1, Jan. 1, April 1, and July 1. The Flower Lady operates on a calendar-year basis and issues financial statements at the end of each quarter. A long-term note payable must be recorded as of July 1 with interest accrued at the end of each quarter. The entries related to the note for the current year are...
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This note was uploaded on 12/25/2011 for the course FIN 3312 taught by Professor Staff during the Spring '08 term at Texas State.

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