ACThe January 1 Year 1 trial balance for the Lewis Company is found on the trial balance tab. The beginning balances are assumed.Center Company entered into the following transactions involving short-term liabilities. (Use 360 days a year.)April 20 Purchased $42,750 of merchandise on credit from Griffin, teras a/36.May 19 Replaced the April 20 sccount payable to Griffin with a 90-day, 121, $16,000 note payable along with payingJuly Borrowed $96,000 cash from MMR Bank by signing a 120-day, 6, $96,000 note payable.August 17 Paid the amount due on the note to Griffin at the maturity date.November 3 Paid the amount due on the note to MMR Bank at the maturity date.November 28 Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8, $57,000 note payable.December 31 Recorded an adjusting entry for socrued interest on the note to Austin Bank.January 27 Paid the amount due on the note to Austin Bank at the maturity date.RequirementJournalGeneralLedgerFTotal interest expense - Year 1Trial BalanceCarter CompanyCalculation of interest expenseAugust 17-Griffin note:PrincipalInterest rateNumber of days Interest to be recorded in Year 1Enter the principal amount, interest rate, and number of days of interest to be recorded for each note. Verify that interestexpense agrees with your journal entries and the trial balance.F2Schedule of Payables80#Schedule ofPayablesF3Calculation ofInterestYear 2 payment >000000$Year 2paymentF4%5FSPrev*********AN1 of 1<MacBook Air6NextF6&7

Interest expense refers to the expense born by an entity in order to take loan or get the loan…

er Company entered into the following transactions involving short-term liabilities. (Use 360 days a year) pril 20 Purchased $42,750 of merchandise on credit from Griffin, terms n/30. May 19 Replaced the April 20 account payable to Griffin with a 90-day, 128, $36,000 note payable along with $6,750 in cash. July 8 Borrowed $96,000 cash from MR Bank by signing a 120-day, 64, $96,000 note payable. gust 17 Paid the amount due on the note to Griffin at the maturity date. wember 5 Paid the amount due on the note to MMR Bank at the maturity date. wember 28 Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8t, $57,000 note payable. cember 31 Recorded an adjusting entry for accrued interest on the note to Austin Bank. ar 2 muary 27 Paid the amount due on the note to Austin Bank at the maturity date. General Journal Requirement Schedule of Payables Year 2 payment Enter the principal amount, Interest rate, and number of days of interest to be recorded for each note, Verify that interest balances are assumer General Ledger Trial Balance Calculation of Interest

er Company entered into the following transactions involving short-term liabilities. (Use 360 days a year) pril 20 Purchased $42,750 of merchandise on credit from Griffin, terms n/30. May 19 Replaced the April 20 account payable to Griffin with a 90-day, 128, $36,000 note payable along with $6,750 in cash. July 8 Borrowed $96,000 cash from MR Bank by signing a 120-day, 64, $96,000 note payable. gust 17 Paid the amount due on the note to Griffin at the maturity date. wember 5 Paid the amount due on the note to MMR Bank at the maturity date. wember 28 Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8t, $57,000 note payable. cember 31 Recorded an adjusting entry for accrued interest on the note to Austin Bank. ar 2 muary 27 Paid the amount due on the note to Austin Bank at the maturity date. General Journal Requirement Schedule of Payables Year 2 payment Enter the principal amount, Interest rate, and number of days of interest to be recorded for each note, Verify that interest balances are assumer General Ledger Trial Balance Calculation of Interest

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 8PA: Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions...

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Notes Receivable Transactions The following notes receivable transactions occurred for Harris Company during the last three months of the current year. (Assume all notes are dated the day the transaction occurred.) Required: 1. Prepare the journal entries to record the preceding note transactions and the necessary adjusting entries on December 31. (Assume that Harris does not normally sell its notes and uses a 360-day year for the purpose of computing interest. Round all calculations to the nearest penny.) 2. Show how Harris notes receivable would be disclosed on the December 31 balance sheet. (Assume these are the only note transactions encountered by Harris during the year.)
Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: a. Journalize the write-offs under the direct write-off method. b. Journalize the write-offs under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded 5,250,000 of credit sales during the year. Based on past history and industry averages, % of credit sales are expected to be uncollectible. c. How much higher (lower) would Casebolt Companys net income have been under the direct write-off method than under the allowance method?
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases thirty fountains for $1,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment.
Laminate Express extended credit to customer Amal Sunderland in the amount of $244,650 for his January 4 purchase of flooring. Terms of the sale are 2/30, n/120. The cost of the purchase to Laminate Express is $88,440. On April 5, Laminate Express determined that Amal Sunderlands account was uncollectible and wrote off the debt. On June 22, Amal Sunderland unexpectedly paid 30% of the total amount due in cash on his account. Record each Laminate Express transaction with Amal Sunderland. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Laminate Express rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, though, that in most cases the direct write-off method is not allowed.
Window World extended credit to customer Nile Jenkins in the amount of $130,900 for his purchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost of the purchase to Window World is $56,200. On September 4, Window World determined that Nile Jenkinss account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed.