Answer:
A) $0, no cash paid in 2016, both interest and principal were paid on March 31, 2017.
B) = [($90,000 x 8%) / 12] x 3 months = ($7,200 / 12) x 3 = $600 x 3 = $1,800
C) = $90,000 + $1,800 = $91,800
D) = ($600 x 6 months) + $90,000 = $3,600 + $90,000 = $93,600
E) = $600 x 3 months = $1,800
A. Cash $0
B. Interest expense $1,800
C.Total liabilities $91,800
D.Cash $93,600
E. Interest expense=$1,800
A. The amount of cash that Abardeen pay for interest in 2016 is $0 because the interest matured on March 31, 2017.
B. The amount of interest expense was recognized on the 2016 income statement is:
Interest expense=($90,000 x 8% x 3 months /12)
Interest expense=$1,800
C. The amount of total liabilities that was reported on the December 31, 2016, balance sheet is:
Total liabilities= $90,000 + $1,800
Total liabilities = $91,800
D. The total amount of cash that was paid to the bank on March 31, 2017, for principal and interest is:
Cash= $90,000 Principal + ($90,000 × 8% × 6/12)] Interest
Cash= $90,000 Principal +$3,600 interest
Cash= $93,600
E. The amount of interest expense that was reported on the 2017 income statement is:
Interest expense=$90,000 × 8% ×3/12
Interest expense=$1,800
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