Entries in income statements
Florenda Quino Forwarders borrowed P600,000 from the bank on September 1, 2012. The note carried on 8% annual rate of interest and was set to mature on Februaryv28, 2013. Interest and principal were paid in cash on the maturity date.
Required:
a) What was the amount of interest expense paid in cash in 2012?
b) What was the amount of interest expense recognized on the 2012 income statement?
c) What was the amount of total liabilities shown in the 2012 balance sheet?
d) What was the total amount of cash that was paid to the bank on February 28, 2013 for principal and interest?
e) What was the amount of interest expense shown on the 2013 income statement?
