The beginning balance in Loan Payable on Company A’s Year 2 Balance Sheet is $180,000. The company took out new loans of $200,000 during Year 2, and repaid $40,000 of loans. What is the beginning balance in Loan Payable on the Year 3 Balance Sheet? Assuming no other transactions affected the account during the year.
Correct answer. The Beginning balance in Loan Payable in Year 3 = Ending Balance in Loan Payable in Year 2 (?) = the Beginning Balance in Loan Payable 180,000 + New loans 200,000 – Repayment 40,000 = 340,000
