Ballers Inc. has the following loans at the end of Year3: $200,000 note payable

Question

Ballers Inc. has the following loans at the end of Year3:

$200,000 note payable to Chase Bank. The bank requires monthly interest payments of $1,000 at the end of each month. Ballers Inc. has made all of these payments (the last payment was made on 12/31/Year3, for December). This is a 3-Year note that was borrowed on May 31, Year1. (The principle is due on June 1, Year4.)

$500,000 note payable to Wells Fargo. This is a 5-Year note borrowed on July 1, Year3. Interest at 6% per year is due annually on June 30. The principle is due on June 30, Year8.

Using just this information (including any interest obligations) prepare the liabilities section of Baller's CLASSIFIED balance sheet at 12/31/Year3. Show an account title for each amount you include.

Explanation / Answer

Balance sheet (Partial) 12/31/Year3 Liabilities Current liabliities: Note payable (Chase Bank) 200000 Interest payable 15000 Total Current liabliities 215000 Long-term liabilities: Note payable (Wells Fargo) 500000 Total Liabilities 715000 Calculation: Interest payable=500000*6%/12*6 = $15000

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.