Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
a2
Transcribed Image Text:ment
Income Statement
Net Income
Revenues
Expenses
II
II
II
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Required information
Exercise 7-5 (Algo) Notes payable-discount basis LO 2
[The following information applies to the questions displayed below.]
On April 15, 2019, Powell Inc. obtained a six-month working capital loan from its bank. The face amount of
the note signed by the treasurer was $255,400. The interest rate charged by the bank was 5.00%. The
bank made the loan on a discount basis.
Exercise 7-5 (Algo) Part a - Horizontal model
a-2. Use the horizontal model to show the effect of signing the note and the receipt of the cash proceeds on April 15,
2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement
effect.)
Balance Sheet
Assets
Liabilities
Stockholders' Equity
Net
II
II](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4a11e060-92c7-4c99-b32c-8bbf9de3d4ca%2Fa267969d-3974-4f58-b7df-2abed2bf5002%2Fzjilbxp_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
Exercise 7-5 (Algo) Notes payable-discount basis LO 2
[The following information applies to the questions displayed below.]
On April 15, 2019, Powell Inc. obtained a six-month working capital loan from its bank. The face amount of
the note signed by the treasurer was $255,400. The interest rate charged by the bank was 5.00%. The
bank made the loan on a discount basis.
Exercise 7-5 (Algo) Part a - Horizontal model
a-2. Use the horizontal model to show the effect of signing the note and the receipt of the cash proceeds on April 15,
2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement
effect.)
Balance Sheet
Assets
Liabilities
Stockholders' Equity
Net
II
II
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