accounting queston 1

Accounting
Tutor: None Selected Time limit: 1 Day

i am stuck on the following question. here is a picture of the question

http://imgur.com/1Q4D7E9

please show all work/how u got the answer

any help would be appreciated

Mar 12th, 2015

                                                                     Flash coporation

a) Classic did not pay any amount for interest in 2010.

b)Amount of interest expense was reported on the 2010 income statement (for two months November and December 2010) = $120,000 *8% *2/12= $1,600

c)Total liabilities on the December 31, 2010:

            Notes Payable                            $120,000

            Interest Payable                               1,600

            Total liabilities                             $121,600

d) Interest expense for 2010 and 2011 =$120,000 *8%*6/12

                                                               = $4,800

    Total amount of cash was paid to bank on April 30, 2011 for principal and interest;

         Principal                                $120,000

         Add interest payable                   4,800

        Total cash payment to bank   $124,800

e) Amount of interest expense was reported on the 2011 income statement(for four months from January 1           to April 30, 2011 = $120,000 * 8%*4/12

                           = $3,200

Mar 12th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Mar 12th, 2015
...
Mar 12th, 2015
Dec 10th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer