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Notes Payable and Interest On July 1, 2017, Anna's Garden Shop borrowed $22,000 from the bank. Anna signed a ten-month, 8% promissory note for the entire amount. Anna's uses a calendar year-end. Required: 1. Identify and analyze the effect of the issuance of the promissory note. Activity Accounts Financing Cash Increase, Notes Payable Increase Balance Sheet only Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income Cash 22,000 Notes Payable 22,000 2. Identify and analyze the effect of any adjustments needed at year-end. Activity Operating Interest Payable Increase, Interest Expense Decrease Accounts Statement(s) Balance Sheet only How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with months in calculation. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. minus sign. Use Balance Sheet Income Statement Net Stockholders' Equity Assets Liabilities Revenues Expenses Income Interest Payable 1,000 -1,000 Interest Expense -1,000 -1,000 3. Identify and analyze the effect of the payment of principal and interest. Activity Financing Accounts Cash Decrease, Notes Payable Decrease, Interest Payable Decrease, Interest Expense Decrease Statement(s) Balance Sheet and Income Statement How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with months in calculation. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. minus sign. Use Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income

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