Solution-Create entries for both south bank and painting co

Create entries for both south bank and painting co

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Reference no: EM132463901

On 1/1/2017, Painting Co. signed a two-year, $300,000 non-interest bearing note with South Bank. Painting Co. received $257,202 in cash from South Bank on 1/1/17. On 12/31/2018, Painting Co. paid $300,000 to South Bank in full payment of the loan.

Question problem 1: Assume that Painting Co. uses the "US Traditional Method" to record notes and the effective interest rate method to compute interest. Assume that South Bank uses the "Net Method" to record notes and the straight-line method to compute interest.

Question problem 2: All required entries for 2017 and 2018. You should create entries for both South Bank and Painting Co.

Based on your answers in Part 1, show how these transactions will be reflected in the financial statements for South Bank and Painting Co. Use the chart on the next page to help you answer this question.

Reference no: EM132463901

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Create entries for both south bank and painting co

Reference no: EM132463901

Reference no: EM132463901

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