Question

Interest Payable

Gohda, Inc., takes out a 12%, 90-day, $123,000 loan with First Rate Savings on March 1, 2017. Assume a 360-day year.

Required:

1. Identify and analyze the transaction to take out the loan on March 1, 2017.

Activity

Accounts

Statement(s)

How does this entry affect the accounting equation?

If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Balance Sheet Income Statement

Stockholders' Net

Assets = Liabilities + Equity Revenues – Expenses = Income

2. Identify and analyze the adjustments for the month of March 2017.

Activity

Accounts

Statement(s)

How does this entry affect the accounting equation?

If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Do not round intermediate calculations. If required, round your final answer to the nearest dollar.

Balance Sheet Income Statement

Stockholders' Net

Assets = Liabilities + Equity Revenues – Expenses = Income

Identify and analyze the adjustments for the month of April 2017.

Activity

Accounts

Statement(s)

How does this entry affect the accounting equation?

If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Do not round intermediate calculations. If required, round your final answer to the nearest dollar.

Balance Sheet Income Statement

Stockholders' Net

Assets = Liabilities + Equity Revenues – Expenses = Income

3. Identify and analyze the transaction on May 30, 2017, when Gohda, Inc., repays the principal and interest to First Rate Savings.

Activity

Accounts

Statement(s)

How does this entry affect the accounting equation?

If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Balance Sheet Income Statement

Stockholders' Net

Assets = Liabilities + Equity Revenues – Expenses = Income

Answer 1

Requirement 1

March 1, 2017

Activity	Operating
Accounts	Cash and Notes payable
Statements	Balance sheet and statement of cash flows

Requirement 2.

March 31, 2017

Activity	Operating
Accounts	Interest expense and interest payable
Statements	Income statement and Balance sheet

April 30, 2017

Activity	Operating
Accounts	Interest expense and interest payable
Statements	Income statement and Balance sheet

Requirement 3.

May 31, 2017

Activity	Operating
Accounts	Cash, note payable, Interest expense and interest payable
Statements	Income statement, Balance sheet and cash flow statement