FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Keesha Company borrows $290,000 cash on December 1 of the current year by signing a 180-day, 8%, $290,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity.arrow_forwardSylvestor Systems borrows $50,000 cash on May 15 by signing a 90-day, 8%, $50,000 note. 1. On what date does this note mature? 2-a. Prepare the entry to record issuance of the note. 2-b. First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your entry to record payment of the note at maturity. Complete this question by entering your answers in the tabs below. Required 2B Interest at Maturity On what date does this note mature? Required 1 Required 2A On what date does this note mature? Required 2B General Journalarrow_forwardPrime Products hopes to borrow $51,000 on April 1 and repay it plus interest of $860 on June 30. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $24,400. Accounts receivable on April 1 will total $151,200, of which $129,600 will be collected during April and $17,280 will be collected during May. The remainder will be uncollectible. b. The company estimates 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% are bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments April $285,000 $194,000 May $ 548,000 June $ 251,000 $ 179,000 $ 171,000 $ 35,400 $ 35,400 $ 19,900 $ 35,800 $ 35,800 $ 35,800 Advertising Equipment purchases Depreciation $ 64,400 $ 64,400 $…arrow_forward
- Martinez Co. borrowed $54,000 on March 1 of the current year by signing a 60-day, 7%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to journalize the payment should include a a. debit to Interest Payable for $630 b. debit to Interest Expense for $630 c. credit to Cash for $54,000 d. credit to Cash for $57,780arrow_forwardShowtime, Inc. borrows $160,000 by issuing an 8%, 5-year note on January 1, 2020. Showcase must make payments of principal and interest every 3 months, beginning December 31, 2024. The note will be fully paid at maturity on Decembet 31, 2024. The company's fiscal year ends on December 31. Prepare the journal entries at January 1, 2020, and March 31, 2020. Prepare the Journal Entry on March 31, 2020 1/1/20 Cash 160,000 Long Term Note Payable 160,000 3/1/20 Interest Expense ?? Long Term Note Payable ?? Cash ??arrow_forwardJasper makes a $25,000, 90-day, 7% cash loan to Clayborn Co. Jasper's entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)arrow_forward
- Harrison Corporation borrowed $35,000 from F&M Bank on June 1 of the current year. The bank required 7% interest. Interest will be paid when the nine-month note becomes due. What is the interest expense for the current year? (Do not round intermediate calculations. Only round your final answer to the nearest dollar.) A. $0 B. $2,450 C. $1,225 D. $1,429arrow_forwardDomesticarrow_forwardSylvestor Systems borrows $174,000 cash on May 15 by signing a 90-day, 6%, $174,000 note. 1. On what date does this note mature? 2-a. Prepare the entry to record issuance of the note. 2-b. First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your entry to record payment of the note at maturity. Complete this question by entering your answers in the tabs below. Required 1 Required 2A View transaction list Use those calculated values to prepare your entry to record payment of the note at maturity. Note: Use 360 days a year. Round final answers to the nearest whole dollar. Required 2B Required 2B Interest at Maturity Journal entry worksheet A General Journal Record the payment of the note at maturity. Note: Enter debits before credits. Date Maturity General Journal Debit Creditarrow_forward
- Assume that on December 1, 2010, your company borrowed $14,000 a portion of which is to be repaid each year on november 30. Specifically your company will make the following principal payments: 2011. $2,000; 2012, $3,000; 2013, $4,000; and 2014, $5,000. Show how this loan will be reported in the December 31, 2011 and 2010 balance sheets, assuming that principal payments will be made when required.arrow_forwardOn January 1, 2018, The Barrett Company purchased merchandise from a supplier. Payment was a noninterestbearing note requiring five annual payments of $20,000 on each December 31 beginning on December 31, 2018,and a lump-sum payment of $100,000 on December 31, 2022. A 10% interest rate properly reflects the timevalue of money in this situation.Required:Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchasedon January 1, 2018.arrow_forwardSheridan Company obtains $36,800 in cash by signing a 7%, 6-month, $36,800 note payable to First Bank on July 1. Sheridan's fiscal year ends on September 30. What information should be reported for the note payable in the annual financial statements? In the balance sheet, Notes Payable of $ reported as In the income statement, Interest Expense of $ and Interest Payable of $ should be reported under should bearrow_forward
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