40) Needem, Inc. borrowed $100,000 from Lendem Commercial Bank, on April 1, 2009 and agreed to repay the principal plus interest on April 1, 2012. The note bears interest at 9% annually (do not compound). Fill in the blanks in the chart below.
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Interest Expense
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Cash Paid For Interest
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Interest Payable
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Year ended Dec. 31, 2009
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$
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$
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$
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Year ended Dec. 31, 2010
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$
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$
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$
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Year ended Dec. 31, 2011
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$
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$
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$
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Year ended Dec. 31, 2012
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$
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$
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$
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41) Record each event in the accounting equation below. Include both amounts and account titles.
Shareholders' equity
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Assets
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Liabilities
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CC
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Retained earnings
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1.
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On November 1, 2011, Lucky Luke, Inc. borrowed $20,000 on a 3-month, 9% notes.
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|
|
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2.
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On November 30, 3011, it adjusted for the interest owed on the note.
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|
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3.Which of the four financial statements are affected by the adjusting entry to accrue interest?
______ Income Statement______ Statement of Changes in Shareholders' Equity
______ Statement of Cash Flows______ Balance Sheet
4.Would your answer in 2. be different if the note was a $20,000,
6-month, 9% note instead of a 3-month note?
42) Match the following terms with the appropriate definitions below. Definitions have not been provided for all of these terms.
a.Interest
b.Principal
c.Liabilities
d.Debtor
e.Creditor
f.Sales revenue
g.Accounts receivable
h.Accounts payable
_____ 1. A party that lends resources with the understanding that the resources will be returned later
_____ 2. The amount borrowed or loaned
_____ 3. What you pay for the use of other people’s money or what you earn by lending money
_____ 4. Assets created by selling goods to customers on credit
_____ 5. A party that borrows resources with the understanding that the resources will be repaid later