On December 31, 2020, Windsor Company had $1,198,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 23,200 shares of its common stock for $28 per share, receiving $649,600 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by an additional $548,400 cash, are used to liquidate the $1,198,000 debt. The December 31, 2020, balance sheet is issued on February 23, 2021. Show how the $1,198,000 of short-term debt should be presented on the December 31, 2020, balance sheet.

Question

Business

Keely Parrish

25 June, 16:36

On December 31, 2020, Windsor Company had $1,198,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 23,200 shares of its common stock for $28 per share, receiving $649,600 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by an additional $548,400 cash, are used to liquidate the $1,198,000 debt. The December 31, 2020, balance sheet is issued on February 23, 2021. Show how the $1,198,000 of short-term debt should be presented on the December 31, 2020, balance sheet.

+1

Answers (1)

Know the Answer?

Hodges · Answer 1

Answer and Explanation:

The balance sheet is shown below:-

The computation of note payable is below:-

Notes Payable = $1,198,000 - $649,600

= $548,400

Total notes payable by the company are$1,198,000, of which $649,600 is common stock issue and $548,400 is cash liquidate.

Windsor Company

Partial Balance sheet

December 31, 2020

Particulars Amount

Current Liabilities:

Notes Payable $548,400

Long term Debt:

Notes Payable $649,600