On December 12, 2024, an Investment in equity securities costing $84,000 was sold for $108,000. The total of the sale proceeds was credited to the Investment in equity securities account. Required: 1. Prepare the Journal entry to correct the error, assuming it is discovered before the books are adjusted or closed in 2024. (Ignore Income taxes.) 2. Prepare the Journal entry to correct the error assuming It is not discovered until early 2025. (Ignore Income taxes.)

On December 12, 2024, an Investment in equity securities costing $84,000 was sold for $108,000. The total of the sale proceeds was credited to the Investment in equity securities account. Required: 1. Prepare the Journal entry to correct the error, assuming it is discovered before the books are adjusted or closed in 2024. (Ignore Income taxes.) 2. Prepare the Journal entry to correct the error assuming It is not discovered until early 2025. (Ignore Income taxes.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hi! I'm trying to practice my practice problems for Accounting but I seem to always get stuck on preparing journal entries. How do I know which journal entry to prepare for each step?
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4. A company borrowed $200,000 on January 1, 2019 to pay them on January 1, 2022. On January 1, 2019, the company received an amount equal to $200,000, less interest discounted at an annual rate of 11.5%, which is the market rate. The company closes its books every December 31.a. Prepare the journal entry for the debtor on January 1, 2019.b. Prepare the journal entry on December 31, 2020 related to this debt. 5. Suppose that the company from the previous exercise number 4 received the full sum of $200,000 on January 1, 2019 and agreed to repay the loan by making three annual payments (January 1, 2020, 2021 and 2022) equal to the base at an interest rate of 11.5%.Prepare the journal entry to record the second of the three annual payments.
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