ps7 - 15.501/516 Problem Set 7 Long-term Debt, Leases and...

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15.501/516 Problem Set 7 Long-term Debt, Leases and Off-Balance Sheet Financing I. Accounting for bonds On December 1, Sung Company obtained a 60-day loan for $50,000 from the City State Bank at an annual interest rate of 6 percent. On the maturity date, the bank renewed the note for another 30 days, and Sung company issued a check to the bank for the accrued interest. Sung Company closes its books annually on December 31. Required: (a) Present the BSE of Sung Company to record the issue of the note, the year-end adjustment, the renewal of the note, and the payment of cash at maturity of the renewed note. (b) Present the BSE at the maturity date of Sung Company’s original note for the following variations in the settlement of the note. 1. Sung pays the original note at maturity. 2. Sung Company renews the note for 30 days; the new note bears interest at 9 percent per annum. Sung did not pay interest on the old note at maturity. II.
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This note was uploaded on 01/16/2012 for the course ACCOUNTING 15.501 / 1 taught by Professor Sugataroychowdhury during the Spring '04 term at MIT.

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ps7 - 15.501/516 Problem Set 7 Long-term Debt, Leases and...

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