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Notes payable for Powell, Inc

Please assist with group project A.

On April 15, 2013, Powell, Inc., obtained a six-month working capital loan from its bank. The face amount of the note signed by the treasurer was $277,700. The interest rate charged by the bank was 7.25%. The bank made the loan on a discount basis.

1. Calculate the loan proceeds made available to Powell.
Loan Proceeds =

2. Use the horizontal model to show the effect of signing the note and the receipt of the cash proceeds on April 15, 2013. (Enter decreases to account balances with a minus sign.)

3. Record the journal entry to show the effect of signing the note and the receipt of the cash proceeds on April 15, 2013.

4. Calculate the amount of interest expense applicable to this loan during the fiscal year ended June 30, 2013. (Round your final answer to nearest whole dollar.)
Interest Expense =

5. What is the amount of the current liability related to this loan to be shown in the June 30, 2013, balance sheet? (Round your final answer to nearest whole dollar.)
Current Liability =

Solution Summary

On April 15, 2013, Powell, Inc., obtained a six-month working capital loan from its bank. The face amount of the note signed by the treasurer was $277,700. The interest rate charged by the bank was 7.25%. The bank made the loan on a discount basis.

$2.19