Saam Company borrowed $40,000 from the bank on December 1, 2014. The note had an 8 percent annual interest rate and matured on May 31, 2015, when Saam paid the principal and interest on the note.
Required:
a) What amount of cash did Saam pay for interest in 2014?
b) What amount of interest expense did Saam report on the 2014 income statement?
c) What was the amount of liabilities that Saam reported on its balance sheet at the end of 2014?
d) What was the amount of cash that Saam paid to the bank on May 31, 2015? How was the cash payment reported on the statement of cash flows?
e) What amount of interest expense was reported on the 2015 income statement?

Question

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The Answer of Saam Company borrowed $40,000 from the bank on December 1, 2014. The note had an 8 percent annual interest rate and matured on May 31, 2015, when Saam paid the principal and interest on the note.
Required:
a) What amount of cash did Saam pay for interest in 2014?
b) What amount of interest expense did Saam report on the 2014 income statement?
c) What was the amount of liabilities that Saam reported on its balance sheet at the end of 2014?
d) What was the amount of cash that Saam paid to the bank on May 31, 2015? How was the cash payment reported on the statement of cash flows?
e) What amount of interest expense was reported on the 2015 income statement?

Saam Company Borrowed $40,000 from the Bank on December 1