Reed Co. had the following transactions (see below) during November and December of 2025. Requirements: 1. What amount of interest will Reed pay in 2025 (use 360 days in calculations as needed)? Record the journal entries for each of the transactions listed below. Record any necessary year-end adjusting journal entries for related to these transactions. Record the payment of the note in 2026. Transactions 1-Nov-25 Issued a note to the bank with the following terms. Interest and principal paid at maturity. Days 75 Interest Rate 5.00% Face Amount $ 75,000.00 1-Dec-25 Received $18,000 cash from a customer as an advanced payment for services to be provided and earned evenly for 1 year. 10-Dec-25 Made cash sales, not including sales tax) of $ 100,000.00 Cost of goods sold for these sales of 81,000.00 Associated sales tax rate is 6% 30-Dec-25 Paid the sales tax related to the Dec 10, 2025 sale.
Reed Co. had the following transactions (see below) during November and December of 2025. Requirements: 1. What amount of interest will Reed pay in 2025 (use 360 days in calculations as needed)? Record the journal entries for each of the transactions listed below. Record any necessary year-end adjusting journal entries for related to these transactions. Record the payment of the note in 2026. Transactions 1-Nov-25 Issued a note to the bank with the following terms. Interest and principal paid at maturity. Days 75 Interest Rate 5.00% Face Amount $ 75,000.00 1-Dec-25 Received $18,000 cash from a customer as an advanced payment for services to be provided and earned evenly for 1 year. 10-Dec-25 Made cash sales, not including sales tax) of $ 100,000.00 Cost of goods sold for these sales of 81,000.00 Associated sales tax rate is 6% 30-Dec-25 Paid the sales tax related to the Dec 10, 2025 sale.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...
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Question
Reed Co. had the following transactions (see below) during November and December of 2025.
Requirements:
- 1. What amount of interest will Reed pay in 2025 (use 360 days in calculations as needed)?
- Record the
journal entries for each of the transactions listed below. - Record any necessary year-end
adjusting journal entries for related to these transactions. - Record the payment of the note in 2026.
Transactions | ||||
1-Nov-25 | Issued a note to the bank with the following terms. Interest and principal paid at maturity. | |||
Days | 75 | |||
Interest Rate | 5.00% | |||
Face Amount | $ 75,000.00 | |||
1-Dec-25 | Received $18,000 cash from a customer as an advanced payment for services to be provided and earned evenly for 1 year. | |||
10-Dec-25 | Made cash sales, not including sales tax) of | $ 100,000.00 | ||
Cost of goods sold for these sales of | 81,000.00 | |||
Associated sales tax rate is | 6% | |||
30-Dec-25 | Paid the sales tax related to the Dec 10, 2025 sale. |
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