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  2.  
  3. Hogeschool Rotterdam (HR)
  4.  
  5. Principles of Finance and Accounting

Summary

Summary Finance chapter 10
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  • Course
  • Principles of Finance and Accounting
  • Institution
  • Hogeschool Rotterdam (HR)
  • Book
  • Studyguide for Financial and Managerial Accounting by Williams, Jan, ISBN 9780078025778

Summary study book Studyguide for Financial and Managerial Accounting by Williams, Jan, ISBN 9780078025778 of Cram101 Textbook Reviews (H10) - ISBN: 9781497009684 (Summary chapter 10)

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  • No
  • H10
  • October 25, 2017
  • 2
  • 2017/2018
  • Summary

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  • finance
  • accounting
  • h10

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  • Principles of Finance and Accounting
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Chapter 10 – Summary
Notes payable
Recording notes payable
Borrowing $10,000 for 6 months at 9% interest per year on November 1st
- Cash debit for $10,000
- Notes payable credit for $10,000

Recording interest expense accrued by December 31st
Interest expenses: $10,000 x 9% x 2/12 = $150

- Interest expense debit for $150
- Interest payable credit $150

Record payment on May 1st (maturity date)
Interest expense: $10,000 x 9% x 4/12 = $300

- Note payable debit for $10,000
- Interest payable debit $150
- Interest expense $300
- Cash credit for $10,450

Amortization table
Page 439

Bonds payable
$1,000,000 bond payable for 20 years at 6%. Dated March 1, 2015. Interest is payable semi-
annually (September 1 and March 1)

Entry at issuance date
- Cash debit for $1,000,000
- Bonds payable credit $1,000,000

First semi-annual payment
Semi-annual interest: $1,000,000 x 6% x ½ = $30,000

- Bond interest expense debit for $30,000
- Cash credit for $30,000

Four months’ interest accrued on September 1.
Bond interest payable: $1,000,000 x 6% x 4/12 = $20,000

- Bond interest expense debit $20,000
- Bond interest payable credit for $20,000

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