below is part of the company transactions regarding the notes payable, the current year end is Dec 31,2011, the assignment required me to correct the errors and prepare journal entries, notes payable balance is now (2,975,000) below is the information related to this note:
Interest expense, for the note payable was calculated as follows:($3,400,000 x 3%).
The note payable was taken out on January 1, 2009. The terms of the note are:
• The note is payable in 10 equal installments of $425,000, plus interest on January 1 of each year.
• 3.00% interest is calculated based on the balance outstanding at December 31; for example, the December 31, 2009, balance would be used to calculate interest to be paid on January 1, 2010.
Kaska Ltd. has always had an effective income tax rate of 30%, and this rate is expected to remain in effect. The effective borrowing rate for any incremental borrowing is 3.0%, unless specifically stated otherwise.
Interest expense, for the note payable was calculated as follows:($3,400,000 x 3%).
The note payable was taken out on January 1, 2009. The terms of the note are:
• The note is payable in 10 equal installments of $425,000, plus interest on January 1 of each year.
• 3.00% interest is calculated based on the balance outstanding at December 31; for example, the December 31, 2009, balance would be used to calculate interest to be paid on January 1, 2010.
Kaska Ltd. has always had an effective income tax rate of 30%, and this rate is expected to remain in effect. The effective borrowing rate for any incremental borrowing is 3.0%, unless specifically stated otherwise.