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b. January 31, on the following year is the maturity date of the notes.
c. Principal P 15,000
Accrued interest (15,000 x 12% x 60 / 360) 300
Maturity value of notes P 15,300
2.
a. total amount. of interest to be paid
25,000 x 6% x 120 / 360
Interest = 500
3.
a. 01/01/x1 Cash P 70,000
Notes Payable P70,000
To record issuance of note.
4. Amortization Table:
DATE PAYMENT DISCOUNT ON AMORTIZATION PRESENT VALUE
NOTE
Jan. 01, 20x1 - - - P 210,000
Dec. 31, 20x1 P 81,487 P 16,800 P 64,687 P 145,314
Dec. 31, 20x2 P 81,487 P 11,625 P 69,862 P 75,451
Dec. 31, 20x3 P 81,487 P 6,036 P 75,451 -
1. A
20,000 X 12% X 5/12 = 1,000
2. C
3. C
4. D
5. A
Interest Expense 25,000 X 8% X 9/12 P 1,500
Less: Interest Expense (Oct.-Dec.) 500
Interest Expense (Jan-Jun) P 1,000
6. D
7. A
8. B
9. D
10. A
Notes Payable P 7,238
Interest Expense (100K x 7%) 7,000
Cash P 14,238