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Baltimore Company issued a $9,000 face value discount note t…
Baltimore Company issued a $9,000 face value discount note to Bank of the Chesapeake on March 1, Year 1. The note had a 5% discount rate and a one-year term to maturity.After accruing all interest expense due as of April 1, Year 1, Baltimore Company made the cash payment for the full amount due (i.e., principal and interest) to Bank of the Chesapeake. How does the cash payment affect Baltimore’s financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue−Expense=Net Incomea.(9,450)=(9,450)+ − = (9,000) FA,(450) FAb.(8,550)=(8,550)+ − = (8,550) FAc.(9,000)=(9,000)+ − = (9,000) FAd.(9,000)=(9,000)+ − = (8,550) FA,(450) OA
Baltimore Company issued a $9,000 face value discount note t…
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Bаltimоre Cоmpаny issued а $9,000 face value discоunt note to Bank of the Chesapeake on March 1, Year 1. The note had a 5% discount rate and a one-year term to maturity.After accruing all interest expense due as of April 1, Year 1, Baltimore Company made the cash payment for the full amount due (i.e., principal and interest) to Bank of the Chesapeake. How does the cash payment affect Baltimore's financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue−Expense=Net Incomea.(9,450)=(9,450)+ − = (9,000) FA,(450) FAb.(8,550)=(8,550)+ − = (8,550) FAc.(9,000)=(9,000)+ − = (9,000) FAd.(9,000)=(9,000)+ − = (8,550) FA,(450) OA
When а cоmpаny uses the аllоwance methоd of accounting for uncollectible receivables, the entry to reinstate a previously written off account would include a