FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- C.S.Sunland Company had the following transactions involving notes payable. July 1, 2025 Nov. 1, 2025 Dec. 31, 2025 Feb. 1, 2026 Apr. 1, 2026 Borrows $55,950 from First National Bank by signing a 9-month, 8% note. Borrows $59,000 from Lyon County State Bank by signing a 3-month, 6% note. Prepares adjusting entries. Pays principal and interest to Lyon County State Bank. Pays principal and interest to First National Bank. Prepare journal entries for each of the transactions. (List all debit entries before credit entries. Credit accarrow_forwardSeifert Supply Company sold merchandise to a customer on December 1, 2020 for $100,000. The transaction resulted in recording a note receivable with a term of 6 months and an annual interest rate of 9%. The company's accounting period ends on December 31, 2020. What amount should Seifert Supply Company recognize as interest revenue on the note receivable on December 31, 2020? A. $1,500 B. $9,000 C. $750 D. $0arrow_forwardook int ences During 2020, Jesse Jericho Enterprises Corporation recorded credit sales of $786,000. At the beginning of the year, Accounts Receivable, Net of Allowance was $93,500. At the end of the year, after the Bad Debt Expense adjustment was recorded but before any bad debts had been written off, Accounts Receivable, Net of Allowance was $70,000. Required: 1. Assume that on December 31, 2020, accounts receivable totalling $10,000 for the year were determined to be uncollectible and written off. What was the receivables turnover ratio for 2020? (Round your answer to 1 decimal place.) Receivables turnover ratio 2. Assume instead that on December 31, 2020, $11,000 of accounts receivable was determined to be uncollectible and written off. What was the receivables turnover ratio for 2020? (Round your answer to 1 decimal place.) Receivables turnover ratioarrow_forward
- On May 31, Baker Co. issued an $35,679, 8%, 120-day note payable to Samunck Co. Assume Baker's fiscal year ends on June 30. Assume a 360- day year for your calculations. a) What is the interest EXPENSE recognized by Baker in the current fiscal year? b) What is the maturity value of the note? c) What is the maturity date of the note?arrow_forwardDecember 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign a $12,000, 60-day note. Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer’s repayment on February 9, 2020, assuming: 1. Interest of 12% was assessed in addition to the face value of the note. 2. The note was issued as a $12,000 non-interest-bearing note with a present value of $11,765. The implicit interest rate on the note receivable was 12%. Assume a 360-day year. (Round to the nearest dollar.)arrow_forwardCulver Company shows a balance of $237,880 in the Accounts Receivable account on December 31, 2020. The balance consists of the following. Installment accounts due in 2021 $23,900 Installment accounts due after 2021 38,300 Overpayments to vendors 3,540 Due from regular customers, of which $39,570 represents accounts pledged as security for a bank loan 87,500 Advances to employees 1,740 Advance to subsidiary company (due in 2021) 82,900 Illustrate how the information above should be shown on the balance sheet of Culver Company on December 31, 2020. Assume that installment accounts collectible due after December 31, 2018 (Customers) are collectible within the operating cycle of the business. The company’s operating cycle is such that all installment receivables are classified as current. CULVER COMPANYBalance Sheet (Partial)arrow_forward
- On July 1, 2020 Walker Inc. signed a $600,000, 15 month, 10% note payable. At due date, the principal and interest will be paid. Calculate the amount of interest expense that Walker Inc. should report on its income statement for the year ended December 31, 2021. (round to the nearest dollar)arrow_forwardSayed Company borrowed $40,000 on August 31, 2020, by issuing an 9-month, 9% interest-bearing note. The company prepares its financial statement annually at the end of December. Maturity date is: April 1, 2020 May 1, 2020 June 1, 2020 July 1, 2020 None of the above The adjusting entry to record the accrued interest on December 31, 2020 is: * Debit Interest Expense and Credit Interest Payable for $1,200 Debit Interest Expense and Credit Interest Payable for $1,500 Debit Interest Expense and Credit Cash for $3,600 Debit Interest Expense and Credit Interest Payable for $2,700 None of the above O Oarrow_forwardOn December 31, 2023, Sandy Company has a Note Receivable of $6,000. The note will be collected in installments. $1,200 is due on December 31, 2024 and $1,200 is due every year after December 31, 2024. The classification of the note on Sandy Company's balance sheet at December 31, 2023 is : A) $4,800 is a current asset and $1,200 is a long-term asset. B) all $6,000 is a long-term asset. C) all $6,000 is a current asset. D) $1,200 is a current asset and $4,800 is a long-term asset.arrow_forward
- Consider the following liabilities of Future Brands, Inc., at December 31, 2016, the company’s fiscal year-end. Should they be reported as current liabilities or long-term liabilities? 1. $77 million of 8% notes are due on May 31, 2020. The notes are callable by the company’s bank, beginning March 1, 2017. 2. $102 million of 8% notes are due on May 31, 2021. A debt covenant requires Future to maintain a current ratio (ratio of current assets to current liabilities) of at least 2 to 1. Future is in violation of this requirement but has obtained a waiver from the bank until May 2017, since both companies feel Future will correct the situation during the first half of 2017.arrow_forwardWaterway Company has the following two notes receivable at May 31, 2024, its fiscal year end: 1. 2. $32,400 six-month, 6% note issued January 1, 2024. $12,000 three-month, 4% note issued April 30, 2024. Interest is payable at maturity for both notes. (a) Calculate the accrued interest on both notes at May 31, 2024. (Round answers to the nearest whole dollar, e.g. 5,275.) Note 1: Note 2: Total accrued interest $arrow_forwardOn September 1,2020, Sunland Company issued a note payable to Fidelity Bank in the amount of $2691000, bearing interest at 9%, and payable in three equal annual principal payments of $897000. On this date, the bank's prime rate was 10%. The first payment for interest and principal was made on September 1, 2021. At December 31, 2021, Sunland should record accrued interest payable of O $89700. O $80730. O $179400, O $53820.arrow_forward
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