Madison Company issued an interest-bearing note payable with a face amount of $24,000 and a stated interest rate of 8% to the Metropolitan Bank on August 1, Year 1

Accounting Aug 12, 2022

Madison Company issued an interest-bearing note payable with a face amount of $24,000 and a stated interest rate of 8% to the Metropolitan Bank on August 1, Year 1. The note carried a one-year term.

Based on this information alone, the amount of total liabilities appearing on Madison's Year 1 balance sheet would be:

Multiple Choice

$24,720

$24,800

$25,920

$24,000

Expert Solution

Answer:

Amount of total liabilities appearing on Madison's Year 1 balance sheet would be:$24,800

Working notes for the answer:

Notes Payable	24000
Interest payable (24,0008%5/12)	800
Total liabelity	24800

of total liabilities appearing on Madison's Year 1 balance sheet would be:$24,800

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