Mark Miller started a moving company on January 1, 2016. On March 1, 2016, Miller borrowed cash from a local bank by issuing a one-year $80,000 face value note with annual interest based on a 12 percent discount. During 2016, Miller provided services for $65,400 cash.
Answer the following questions. Record the events in T-accounts prior to answering the questions.
a. What is the amount of total liabilities on the December 31, 2016, balance sheet?
b. What is the amount of net income on the 2016 income statement?
c. What is the amount of cash flow from operating activities on the 2016 statement of cash flows?
d. Provide the general journal entries necessary to record issuing the note on March 1, 2016; recognizing accrued interest on December 31, 2016; and repaying the loan on February 28, 2017.