Ch 12 LT Liabilities and Present Value of Money
Solution
Requirement 1: Journal Entry:
Calculation of Debt to Equity Ratio:
Debt to Equity Ratio = Total Liabilities / Total Equity
Debt to Equity Ratio: 22,750 / 32,500 = 0.70
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Ch 12 LT Liabilities and Present Value of MoneySolutionRequirement 1-.docx
1. Ch 12 LT Liabilities and Present Value of Money
Solution
Requirement 1: Journal Entry:
Calculation of Debt to Equity Ratio:
Debt to Equity Ratio = Total Liabilities / Total Equity
Debt to Equity Ratio: 22,750 / 32,500 = 0.70
Date Account Title Debit($) Credit($)
2014, Mar1 Cash 520,000
15% Note Payable 520,000