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[The following information applies to the questions displayed below.] On January 1, 2018, Brown Co. borrowed...

[The following information applies to the questions displayed below.]

On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $66,500 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $20,078 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $30,590 cash per year.

Problem 7-30 Part b

  1. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles / Retained Earnings, leave the cell blank.)
  2. BROWN CO.
    Effect of Events on the Accounting Equation
    2018, 2019, 2020 and 2021
    Event Assets = Liabilities + Stockholders' Equity Accounts Titles / Retained Earnings
    Cash + Land = Notes Payable + Retained Earnings
    2018
    1/1 + = +
    1/1 + = +
    12/31 + = +
    12/31 + = +
    Bal. 0 + 0 = 0 + 0
    2019
    Beg. bal. + = +
    12/31 + = +
    12/31 + = +
    End. bal. 0 + 0 = 0 + 0
    2020
    Beg. bal. + = +
    12/31 + = +
    12/31 + = +
    End. bal. 0 + 0 = 0 + 0
    2021
    Beg. bal. + = +
    12/31 + = +
    12/31 + = +
    End. bal. 0 + 0 = 0 + 0

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Expert Solution

ekkarill92 answered 3 months ago
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