On December 31,2015,Newco Borrowed $100,000 from First National Bank,and Signed

question 85

Essay

On December 31,2015,Newco borrowed $100,000 from First National Bank,and signed a 12% note payable due in two years.Interest on the note is due at maturity.
Required:
Part a.Prepare the journal entry to record the borrowing transaction.
Part b.Describe how the note should be reported on Newco's classified balance sheets at December 31,2015 and December 31,2016.
Part c.Prepare the required adjusting entry on December 31,2016.
Part d.Prepare the journal entry to record the payment of the interest on December 31,2017.
Part e.Prepare the journal entry to record the payment of the note on December 31,2017.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with higher elasticity indicating a greater responsiveness.

Profit-Maximizing Price

The optimal selling price for a product or service that leads to the highest possible profits for the producer or seller.

Weebles

A line of children's toys designed with a weighted bottom so that they wobble but don't fall down.

Market

A social or economic system where goods and services are exchanged between buyers and sellers using money or barter.