Question

On March 10, the GGD Co a promissory note for a Problem 5 1. in the GGD Company borrowed $36,000 from a bank. The company ar note for a term of three years, with payments to start on April 10. Month ments are required, consisting of $1,000 on the principal plus interest to be compte the rate specified on the note. On March 31, what amount will appear as a long-term liability on the balance sheet? Problem 6 For this problem, continue to use the information provided in Problem 5. On April 10, the GGD Company made its first payment on the note; the payment consisted of 51.000 on the principal plus accrued interest on the unpaid balance. On May 10, the company made its second payment on the note, consisting of $1,000 on the principal plus accrued interest on the unpaid balance. What amounts will appear as long-term debt on the balance sheets dated April 30 and May 31?

Answer 1

5)
Note Payable (long-term)	$36,000
On March 31, the long-term note reported on the balance is $36,000 because the deduction of payment towards principal amount of $1,000 will be paid after March 31st, hence, the balance is $36,000 only.
6)
Balance on April 30:
Note Payable (long-term)	$36,000
Less: First payment towards principal amount	($1,000)
Balance on April 30	$35,000
Balance on May 31:
Balance on April 30	$35,000
Less: Second payment towards principal amount	($1,000)
Balance on May 31	$34,000