Mgmt 200 Assignment Soln 3-30-11

Mgmt 200 Assignment Soln 3-30-11 - Cash 500,000 Notes...

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Management 200 – Introductory Financial Accounting– Spring 2011 Krannert School of Management - Purdue University Solutions to class assignment for March 30, 2011 Additional Perspective 9-1 Requirement 1 (1) Date (2) Cash Paid (3) Interest Expense (4) Decrease in Carrying Value (5) Carrying Value Face Amount x Stated Rate Carrying Value x Market Rate (2) – (3) Prior Carrying Value – (4) 1/ 1 /14 $ 500,000 1/31/14 $ 5,551 $ 2,500 $ 3,051 496,949 2/28/14 5,551 2,485 3,066 493,883 Requirement 2 January 1, 2014
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Unformatted text preview: Cash 500,000 Notes Payable 500,000 (Issuance of a mortgage note payable) January 31, 2014 Interest Expense ($500,000 x 6% x 1/12) 2,500 Notes Payable (difference) 3,051 Cash (monthly payment) 5,551 (To record the first monthly mortgage payment) February 28, 2014 Interest Expense (496,949 x 6% x 1/12) 2,485 Notes Payable (difference) 3,066 Cash (monthly payment) 5,551 (To record the second monthly mortgage payment)...
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