Reference no: EM132472340

Question 1: Show what Mission Co. reports for the note payable and related interest payable on its balance sheet at December 31, 2019, and on its income statement for the year ended on that date.

(Reporting a short-term note payable and the related interest Interest Expense, $800)

[(S11-1 On July 31, 2019, Mission Co. purchased $32,000 of inventory on a one-year, 6 percent note payable. Journalize the company's (a) accrual of interest expense on December 31, 2019, and (b) payment of the note plus interest on July 31, 2020.)

(Accounting for a note payable Credit Cash for $33,920)]

Question 2: Record the following note payable transactions of Lambda Company in the company's general journal. Explanations are not required.

2019

1. June 1 Purchased delivery truck costing $86,000 by issuing a one-year, 6 percent note payable.
2. Dec. 31 Accrued interest on the note payable.

2020

1. Jun. 1 Paid the note payable at maturity.
2. (Recording note payable transactions June 1, 2020, Credit Cash, $91,160)