A Five-Year, 6%, $50,000 Note Payable Is Issued on January

question 119

Multiple Choice

A five-year, 6%, $50,000 note payable is issued on January 1. Terms include fixed annual principal payments of $10,000, plus interest on the outstanding balance. The entry to record the first instalment payment will include a

• A)debit to Notes Payable of $10,000.
• B)credit to Interest Expense of $3,000.
• C)credit to Notes Payable of $13,000.
• D)debit to Cash of $10,000.

Define the scope of economics and its application to decision-making and resource allocation.

Recognize the impact of information availability on market operations and efficiency.

Analyze the financial implications of educational investments and choices.

Identify the relationship between scarce resources and the emergence of opportunity costs.

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Definitions:

Available-for-Sale

A classification for financial assets that are not to be held to maturity or for trading purposes, allowing for changes in value to be recorded in other comprehensive income.

Unrealized Increase/Decrease

Unrealized increase/decrease refers to the changes in the value of investments that have not yet been sold and the gains or losses have not been 'realized' through a transaction.

Fiscal Year

A one-year period chosen by a business or government for accounting purposes, which may or may not align with the calendar year.

Unrealized Increase/Decrease

Change in the market value of assets that have not been sold, impacting a company's financial statements in terms of valuation but not cash flow.