Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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If Tyler uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Tyler determines that Fell's $2,450 balance is uncollectible.
On December 31, 2019, Mason Company made following proper year-end adjusting entries:
1. Prepare journal entries to record whatever reversing entries you think appropriate. 2. Explain your reasoning for each reversing entry.
Nicole thinks that her business, Nicole's Getaway Spa (NGS), is doing really well and she is planning a large expansion. With such a
large expansion, Nicole will need to finance some of it using debt. She signed a one-year note payable with the bank for $53,000 with
a6 percent interest rate. The note was issued October 1, 2020; Interest is payable annually, and the end of Nicole's accounting period
is December 31.
Required:
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- e. Assuming the company closes its books on December 31st, prepare the journal entries for 12/31/19 and 1/1/20. g. Assuming the error was discovered at the end of 2019 but before closing the books, prepare the necessary journal entry(ies) to correct the error.arrow_forwardPrepare the adjusting entry to record the accrual of interest on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)arrow_forwardThe following transactions involving intangible assets of Oriole Corporation occurred on or near December 31, 2020. 1. Minton paid Grand Company $440,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Oriole is in business. Oriole spent $600,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. 2. In January, 2021, Oriole's application for a patent (#2 above) was granted. Legal and registration costs incurred were $249,900. The patent runs for 20 years. The manufacturing process will be useful to Minton for 10 years. Oriole incurred $180,800 in successfully defending one of its patents in an infringement suit. The patent expires during 3. 4. December, 2024. Oriole incurred $470,400 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a remaining unamortized cost of $241,920, is…arrow_forward
- During the year ended December 31, 2021 the following transactions occurred: The table is in the pictures  Prepare all the journal entries necessary to record the above transactions and any necessary December 31 year end adjusting entries. No need to provide closing entries. Ignore income and sales taxes . Clearly label of the number is credited or debitedarrow_forward(A) Prepare the journal entries to record the events above dates June 10, July 12, August 10 and October 25. (B) Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2018. (C) Show the ledger account for Allowance for Doubtful Accounts with all entries for 2018 and the ending balance after adjustment at December 31, 2018.arrow_forwardPrepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit December 31, 2020arrow_forward
- Wildhorse Co. issued $6,720,000 of 8% bonds on October 1, 2020, due on October 1, 2025. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Wildhorse Co. closes its books annually on December 31.arrow_forwardWhich of the following statements concerning reversing entries is true? Reversing entries are required by Generally Accepted Accounting Principles. Reversing entries are most often used with accrual-type adjustments. Reversing entries are dated December 31, the end of the fiscal year. Reversing entries are recorded before adjusting entries.arrow_forwardTamarisk Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $11,600,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Tamarisk's equipment. Tamarisk's controller estimates that expected future net cash flows on the equipment will be $7,308,000 and that the fair value of the equipment is $6,496,000. Tamarisk intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Tamarisk uses straight-line depreciation.arrow_forward
- On January 1, 2021, LLB Industries borrowed $400,000 from Trust Bank by issuing a two-year, 8% note, with interest payable quarterly. LLB entered into a two-year interest rate swap agreement on January 1, 2021, and designated the swap as a fair value hedge. Its intent was to hedge the risk that general interest rates will decline, causing iPhone USB ue of its debt to increase. The agreement called for the company to receive payment based on a 8% fixed interest rate on a notional amount of $400,000 and to pay interest based on a floating interest rate. The contract called for cash settlement of the net interest amount quarterly. Floating (LIBOR) settlement rates were 8% at January 1, 6% at March 31, and 4% June 30, 2021. The fair values of the swap are quotes obtained from a derivatives dealer. Those quotes and the fair values of the note are as indicated below. Fair value of interest rate swap Fair value of note payable January 1 0 $400,000 Required: 1. Calculate the net cash…arrow_forwardBenderson, Inc. makes adjusting journal entries (AJEs) at the end of every month when they prepare their financial statements. Their accountant forgot to record the AJE to accrue utility expense for July 2019 on the July 31, 2019 financial statements. As a result of the omission:arrow_forwardWhat are the adjusting journal entries that affected the accounts at Dec. 31 of the current year?arrow_forward
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