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week 6 Accounting homework assignment

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Requirement 1. How much interest expense must be accrued at December 31, 2018? (Round your answer to the nearest whole dollar.) A short-term note payable is a liability of a business. A business that ... signs a promissory note agrees to pay interest as a cost of borrowing the money. Interest accrues on a note payable with the passage of time. Therefore, even though the interest won't be paid until the maturity date, at year end it is necessary to accrue interest on the notes payable. Review the formula provided and calculate the accrued interest at December 31, 2018. (Round your final answer to the nearest whole dollar.) Principal x Rate x Time = Accrued interest $ 60,000 x 10 % x 3 /12 = $ 1,500 Requirement 2. Determine the amount of East Sales' final payment on October 1, 2019. When the note matures on 1, , will pay back the principle of the note, plus any interest accrued on the note for the time the money was owed. Use the formula below to calculate the amount of interest due when the note payable is paid. (Round your final answer to the nearest whole dollar.) October 2019 East Principal x Rate = Accrued interest $ 60,000 x 10 % = $ 6,000 Now we can compute the final payment . Remember, we will pay back the principal of the note plus the interest on the note at maturity. 3 The amount of East Sales' final payment on October 1, 2019 is $ 66,000 . Requirement 3. How much interest expense will East Sales report for 2018 and for 2019? (If needed, round your answer to the nearest whole dollar.) We have calculated the interest on the note from the date that the money was borrowed through December 31, . Now we must determine the amount of interest that was incurred for the months in . This is the amount that w [Show More]

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