AFM391 Study Guide - Final Guide: Promissory Note, Retained Earnings, Financial Statement

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM391
• Professor: Sasan Saiy

Document Summary

On june 30 t h, 2013, ec received ,000 from ffi in exchange for a promissory note. The terms of the note require ec to repay ffi on june 30 t h, 2015, the principal amount plus interest 6% per annum compounded semi annually . Due to financial difficulties ec cannot make the repayment as scheduled. 2015 ffi agreed to extend the terms of repayment by one year to june 30 t h, 2016. However, accounting staff at ffi were unaware of the chang e in repayment terms and did not record the effects of the note restructuring during 2015 . The error was discovered on june 30 t h, 2016 when ec paid ffi ,275 in fulfillment of the terms of the restructured note. Fi has a december 31st year end . No interest had been accrued between the original payment date and the extended repayment date.