Question

100.0 On 6/1/21, the company, XYZ, borrowed 100,000 from a Kbank @ 6% interest for a 9 month note (interest is stated as annual percentage rate unless otherwise noted) 4.)If no adjusting entries were recorded by KBank during the year the adjusting entry on 12/31/21 is: CAS If the company fails to make an adjusting entry, the impact on the accounting equation is: 5.) Record the receipt on 2/28/22 if kbank makes reversing entries. 6.)Record thereceipt on 2/28/22 if Kbank doesn't make reversing entries.

Answer 1

Sub Part 4: If no Adjusting entries were recorded by Kbank during the year, the adjusting entry on 12/31/21: Journal Entries Date Account Title and Explaination Post. Ref. Debit $ Credit $ $ 3,500.00 $ 3,500.00 Interest Receivable ($100000 x 6% x 7/12) Interest Revenue (To record adjusting entry for earned interest revenue) If the Company fails to make Adjusting Entry, the impact on the accounting equation is Equity is Understated by $3500 Assets are Understated by $3500

Sub Part 5: Recording the Receipt on 2/28/22 if Kbank makes reversing entries: Journal Entries Date Account Title and Explaination Post. Ref. Debit $ Credit $ $ 104,500.00 2/28/22 Cash Interest Revenue ($100000 x 6% x 9/12) Notes Receivable (To record collection of Note Receivable along with interest) $ $ 4,500.00 100,000.00 Sub Part 6: Recording the Receipt on 2/28/22 if Kbank doesn't makes reversing entries: Journal Entries Date Account Title and Explaination Post. Ref. Debit $ Credit $ $ 104,500.00 2/28/22 Cash Interest Revenue ($100000 x 6% x 2/12) Interest Receivable ($100000 x 6% x 7/12) Notes Receivable (To record collection of Note Receivable along with interest) $ $ $ 1,000.00 3,500.00 100,000.00