FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- On September 1, 2018, Mills Company borrowed $72000 cash on a one-year note that required Mills to pay 8 percent interest and $72000 principal, both on August 31, 2019. Assuming the note is paid when due in 2019, what is the debit to interest payable when recording the payment of the note?arrow_forwardSheridan Corporation borrowed $62,400 on November 1, 2020, by signing a $63,600, 3-month, zero-interest-bearing note. Prepare Sheridan's November 1, 2020, entry; the December 31, 2020, annual adjusting entry; and the February 1, 2021, entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date (To record interest) (To pay note) Debit Creditarrow_forwardOn January 1, 2025, Cullumber Corporation issued $610,000 of 9% pay interest each July 1 and January 1. The effective-interest rate is 8%. Prepare the company's journal entries for (a) the January 1 issuance. (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Cullumber uses the effective-interest method. (Round answers to O decimal places, e.g. 38,548. If no entry is required. select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries) Account Titles and Explanation No. (a) (b) (c) bonds, due in 10 years. The bonds were issued for $651,453, and Date Debit Crearrow_forward
- Larkspur Corporation borrowed $78,000 on November 1, 2025, by signing a $79,755, 3-month, zero-interest-bearing note. Prepare Larkspur's November 1, 2025, entry; the December 31, 2025, annual adjusting entry; and the February 1, 2026, entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date 11/1/25 12/31/25 2/1/26 > Account Titles and Explanation Cash (To record discount amortization) (To record repayment of note) Debit Creditarrow_forwardOn November 1, 2019, Norwood borrows $410,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $105,407 each year on October 31. Required:1. Complete an amortization table for this installment note.2. Prepare the journal entries in which Norwood records the following:(a) Accrued interest as of December 31, 2019 (the end of its annual reporting period).(b) The first annual payment on the note.arrow_forwardon october 1, 2019, Island Jewelry company accepted a 4 -month, 10% note fot $2,400 in settlement of an overdue account receivable. Interest revenue was accrued thruogh december 31, 2019. island receives maturity value of the note at maturity. prepare the journal entry to record the collection.arrow_forward
- Sunland Company lends Monty industries $49200 on August 1, 2022, accepting a 9-month, 9% interest note. If Sunland Company accrued interest at its December 31, 2022 year-end, what entry must it make to record the collection of the note and interest at its maturity date?arrow_forwardThe following amortization schedule indicates the interest and principal to be repaid on an installment note established January 1, 2021, for a company with a March 31 fiscal year-end. Period 1/1-12/31, Year 1 Interest Expense on Notes Payable $ 560 424 #TITT 286 144 1,414 1/1-12/31, Year 2 1/1-12/31, Year 3 1/1-12/31, Year 4 Total Beginning Notes Payable $ 28,000 21, 207 14, 278 Repaid Principal Ending Notes 7,210 $ 6,793 6,929 7,068 7,210 28,000 Payable $ 21,207 14,278 7,210 Required: 1. Assuming the company makes the required annual payments on December 31, use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of Interest Expense to report in the year ended March 31, 2021; (c) the amount of Interest Expense to report in the year ended March 31, 2022; (d) the Notes Payable balance at January 1, 2024; and (e) the total interest and total principal paid over the note's entire life 2. Assuming the company makes adjustments at the end…arrow_forwardThe balance of the Estimated Warranty Liability account was $12,000 on January 1, 2019, and $13,600 on December 31, 2022. Based on an analysis of warranty claims during the past several years, this year's warranty provision was established at 3% of sales, and sales during the year were $800,000. Required: a). What amount of warranty expense will appear on the income statement for the year ended December 31, 2022? b). What were the actual costs of servicing products under warranty during the year?arrow_forward
- At December 31, 2017 (the end of the fiscal year), Bridgeport Corporation owes $1,600,000 on a note payable due January 31, 2018. (a) - Your answer is incorrect. If Bridgeport refinances the obligation by issuing a long-term note on February 20, 2018 and using the proceeds to pay off the note due January 31, how much of the $1,600,000 should be reported as a current liability at December 31, 2017? Amount to be reported as a current liability at December 31, 2017 2$arrow_forward16. On October 1, 2020, Zachary's Balloons borrowed S4,000 on a 12%, one-year note payable. Interest was payable semiannually. A correct adjusting entry was made on December 31, 2020, and a correct reversing entry was made on January 1, 2021. The entry that should be made on March 31, 2021, is a. Interest Payable 240 Cash 240 b. Interest Expense Interest Payable 120 120 Cash 240 c. Interest Expense 240 Cash 240 d. Interest Expense 120 Cash 120arrow_forwardSarasota Company borrowed $34,800 on November 1, 2025, by signing a $34,800, 9%, 3-month note. Prepare Sarasota's November 1, 2025, entry; the December 31, 2025, annual adjusting entry; and the February 1, 2026, entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Creditarrow_forward
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