On December 31, 2017, Stellar Company had $1,159,000 of short-term debt in the form of notes payable due February 2, 2018. On Ja
nuary 21, 2018, the company issued 25,500 shares of its common stock for $45 per share, receiving $1,147,500 proceeds after brokerage fees and other costs of issuance. On February 2, 2018, the proceeds from the stock sale, supplemented by an additional $11,500 cash, are used to liquidate the $1,159,000 debt. The December 31, 2017, balance sheet is issued on February 23, 2018.Show how the $1,159,000 of short-term debt should be presented on the December 31, 2017, balance sheet.
1 answer:
Answer:
Explanation:
Before showing how short term debt should be presented before doing this we have to classify the items in each head
Like - In current liabilities, notes payable is recorded at $11,500
And, in the long term liabilities, the proceed after brokerage fees for $1,147,500 should be recorded.
The total amount would remain the same i.e $1,159,000
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Morgan will get $1600 with the process of simple interest.
<h3>what is simple interest?</h3>Simple interest is calculated based on a loan's principal or the initial deposit into a savings account. Simple interest doesn't compound, therefore a creditor will only charge interest on the principal sum, and a borrower will never be required to pay further interest on the interest that has already accrued.
Rate of interest = 12%
principal = $1000
Time = 5 years
Simple interest
Now amount = 1000+600 = 1600.
Therefore, Morgan will get $1600.
To learn more about simple interest from the given link
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