Reference no: EM132482405

Question 1a) Prepare instalment payment schedule and record note payable. Identify balance sheet presentation.

On January 1, 2017, Wolstenholme Corp. borrows $18,000 by signing a 3-year, 7% note payable. The note is repayable in three annual blended payments of $6,859 on December 31 of each year.

Instructions

Question (a) Make an instalment payment schedule for the note.

Question (b) Prepare journal entries to record the note and the first instalment payment.

Question (c) What amounts would be reported as current and non-current in the liabilities section of Wolstenholme's balance sheet at December 31, 2017?

Question 1b) Prepare instalment payment schedule and record note payable. Identify balance sheet presentation.

On January 1, 2017, Jarvis Corp. borrows $8,400 by signing a 3-year, 3% note payable. The note is repayable in three annual fixed principal payments on December 31 of each year.

Instructions

Question (a) Calculate the annual principal payment.

Question (b) Make an instalment payment schedule for the note.

Question (c) Prepare journal entries to record the note and the first instalment payment.

Question (d) What amounts would be reported as current and non-current in the liabilities section of Jarvis' balance sheet at December 31, 2017?

Question 1c) Prepare non-current liabilities section of balance sheet.

The adjusted trial balance for Ray Corporation at July 31, 2017, the corporation's fiscal year end, contained the following:

Accounts payable                                                     $ 96,000

Note payable                                                           $140,000

Accounts receivable                                                   112,000

Lease liability                                                             65,000

Bonds payable, due 2021                                            205,000

Note receivable, due December 2017                              35,000

Interest payable                                                         5,000

Unearned revenue                                                      10,000

Of the lease liability amount, $16,250 is due within the next year. Total payments on the note payable in the fiscal year 2018 will be $27,000: $7,000 is for interest and $20,000 for principal repayments.

Instructions

Question (a) Prepare the non-current liabilities section of the balance sheet as at July 31, 2017.

Question (b) Some of the accounts above belong in the balance sheet but not in its non-current liabilities section. What is the correct classification for them?