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fomenos
3 years ago
7

On the first day of the fiscal year, Shiller Company borrowed $63,000 by giving a five-year, 12% installment note to Soros Bank.

The note requires annual payments of $17,773, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $7,560 and principal repayment of $10,213. Journalize the entries to record the following: a1. Issued the installment note for cash on the first day of the fiscal year.
Business
1 answer:
lidiya [134]3 years ago
8 0

Answer:

Bank A/c  Dr           $63,000

  To Notes Payable                         $63,000

(Being the issuance of the installment note for cash is recorded)

Explanation:

The journal entry is shown below:

Bank A/c  Dr           $63,000

  To Notes Payable                         $63,000

(Being the issuance of the installment note for cash is recorded)

For recording this transaction, we debited the bank account as it increased the assets account and at the same time it decreased the liabilities so the notes payable is credited

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I wholeheartedly agree and think it’s practically self-evident.

Here’s an excellent example from history.

For 28 years, the Berlin Wall separated East Berlin from West Berlin and was the most heavily militarized border crossing in the Western hemisphere. In 1989, during a press conference with western media, Gunther Schabowski was handed a note explaining a change in policy governing border crossing. Several discussions took place about making a show of opening the border between East and West Germany, but nobody informed Schabowski.

At the end of the press conference, he appears to have remembered the note belatedly, and read it verbatim—which was not what was intended. When asked about when the border would open, he assumed it was immediate.

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Within hours, the border crossing was practically buried under thousands of East Germans eager to be reunited with their families and other loved ones after 28 years on the press conference, which had been broadcast live.

The East Germans believed what they were told: Schabowski said immediately, and they intended to go immediately.

Border guards kept calling for instructions, until finally, they relented.

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273 viewsView 2 Upvoters · Answer requested by Never Wong
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