Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.4BE
• LO2–2
Prepare journal entries for each of the following transactions for a company that has a fiscal year-end of December 31: (1) on October 1, $12,000 was paid for a one-year fire insurance policy; (2) on June 30 the company lent its chief financial officer $10,000; principal and interest at 6% are due in one year; and (3) equipment costing $60,000 was purchased at the beginning of the year for cash.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
QUESTION 12
George provides you with the following information in respect of the 2022 income year:
$
• gross salary and wages
• a compensation payment from an insurance company for the loss of one finger
28,000
• interest accrued at 30 June 2022 in respect of a 6-month term deposit invested on 5 January 2022
but not paid to George until 5 July 2022
900
• Navy Reserve pay (for part-time service eight weekends per year)
1,600
71,000
What is George's assessable income for the 2022 income year?
$71,000
$71,900
$72,600
O $73,500
Problem 15
Ball Company purchased a P1,000,000 ordinary life insurance policy on its present. Ball Company is the
beneficiary under the life insurance policy. The policy year and Ball's accounting year coincide. Additional
data available for the year ended December 31, 2018 are as follows:
Cash surrender value, January 1
43,500
54,000
20,000
3,000
Cash surrender value, December 31
Annual advance premium paid January 1
Dividend received July 1
What amount should be reported as life insurance expense for 2018?
a. 6,500
b. 9,500
C. 17,000
d. 20,000
Brief Exercise 10-01
Jamison Company has the following obligations at December 31:
For each obligation, indicate whether any portion of it should be classified as a current liability. (Assume a
operating cycle of less than one year.)
Obligations
(a) A note payable for $100,000 due in 2 years.
(b) A 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments.
(c) Interest payable of $15,000 on the mortgage.
(d) Accounts payable of $60,000.
Click if you would like to Show Work for this question:
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 25 A company purchases a piece of machinery by issuing a $300,000 five-year note payable. The stated and effective annual interest rates are both 6%, and monthly installment payments are $5,800. What is the balance in the Notes Payable account after two payments have been made? $288,400 O $291,379 $295,700 $300,000 NEXT > BOOKMARKarrow_forwardQuestion 1 of 5 Construction loan-12% interest, payable semiannually, issued December 31, 2019 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 TamariskFurniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $12,000,000 on January 1, 2020. Tamarisk expected to complete the building by December 31, 2020. Tamarisk has the following debt obligations outstanding during the construction period. -/5 Avoidable Interest $ $4,800,000 3,600,000 2,400,000 Assume that Tamarisk completed the office and warehouse building on December 31, 2020, as planned at a total cost of $12,480,000, and the weighted-average amount of accumulated expenditures was $8,640,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational…arrow_forwardQuestion 8 Scamp Company borrowed $48,000 on a 7% one-year, interest bearing note dated November 1, 2022, all payments due on maturity. The annual accounting period ends on December 31. a. Give journal entries on the following dates: November 1, 2022 December 31, 2022 October 31, 2023 b. In good form, show what will be included on the Statement of Financial Position at year end.arrow_forward
- Computing and Recording Interest Capitalization The following information is from Bowin Inc. for a long-term construction project that is expected to be completed in January of next year. The construction project is for a building intended for the company's own use. The capital expenditure on January 1 of the current year is for the purchase of land for the building site. No new construction loans were opened for the project during the year. All debt was outstanding for the full year. Capital Expenditures for Current Year Date Actual Expenditures Jan. 1 Mar. 31 June 30 Nov. 30 Outstanding Debt in Current Year Debt Note payable Note payable Bond payable Note payable $102,000 3,060,000 6,120,000 3,060,000 Debt Amount Interest Rate $3,400,000 8% 2,720,000 8% 10% 9% 6,800,000 1,700,000 Check Compute Interest to Capitalize and Expense Journal Entry in Year 1 Journal Entries in Year 2 b. Prepare the summary entry to record the construction expenditures and interest for the year. Assume all…arrow_forwardModule 11 Part I: Chapter Problems B, Assignment Please complete the following item: Assume Strand Corp borrowed $200,000 from the bank on 7/1/20; Strand is a calendar year-end. Interest rate 6%. It is a 1 year note, payable at the end of 1 year. Make the necessary journal entry on 7/1/20, 12/31/20 and 6/30/21 If vou are not familiar witharrow_forwardAccounting principal 2 chapter-14 Q:- On April 1,2019 Cowell Company issued $3000000, 20 year year,ond at 95 so that investors would receive a 6% return their investments. Interest is payable semi-annually. A) Record the Journal entry April 11, 2019 B)Record the journal entry for September 30, 2019(straight-line method of amortization) C) same as B except use the effective interest method. D)Record the adjusting entry Dec. 31, 2019(straight-line method) E)Record the necessary closing entryarrow_forward
- Saved Exercise 9-4 Interest-bearlng notes payable with year-end adjustments LO P1 Keesha Co. borrows $235,000 cash on November 1 of the current year by signing a 90-day, 11%, $235,000 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 and 3 Req 4 What is the amount of interest expense in the current year and the following year from this note? (Use 360 days a year. Round final answers to the nearest whole dollar.) es Interest Total through maturity Interest Expense Current Year Expense Following Year Principal Rate (%) Time Total interestarrow_forwardSupplemental Problem 15-3 Appropriation of Retained Earnings Dayton Company has decided to build a new warehouse at a cost of $2 million. It will appropriate $1 million in each of the next two years, then build the warehouse at the beginning of the third year. Required: Assuming Dayton makes journal entries to account for appropriations, record the following: 1. The appropriation of Retained Earnings in year 1. 2. The appropriation of Retained Earnings in year 2. 3. The completion of the warehouse in year 3 at an actual cost of $2,300,000. Dayton paid cash. 4. The release of the appropriation in year 3.arrow_forwardPayroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: 101 Salaries Payable 108 Bond Deductions Payable 2,300 102 Social Security Tax Payable 2,913 109 Medical Insurance Payable 2,520 103 Medicare Tax Payable 728 201 Operations Salaries Expense 700,000 104 Employees Federal Income Tax Payable 4,490 301 Officers Salaries Expense 340,000 105 Employees State Income Tax Payable 4,078 401 Office Salaries Expense 155,000 106 State Unemployment Tax Payable 1,260 408 Payroll Tax Expense 59,491 107 Federal Unemployment Tax Payable 360 The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December: Dec. 1. Issued Check No. 815 to Aberderas Insurance Company for 2,520, in payment of the semiannual premium on the group medical insurance policy. 1. Issued Check No. 816 to Alvarez Bank for 8,131, in payment for 2,913 of social security tax, 728ofMedicare tax, and 4,490 of employees federal income tax due. 2. Issued Check No. 817 for 2,300 to Alvarez Bank to purchase U.S. savings bonds for employees. Dec. 12. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Salary distribution: Operations 14,500 Officers 7,100 Office 2,600 24,200 Deductions: Social security tax 1,452 Medicare tax 363 Federal income tax withheld 4,308 State income tax withheld 1,089 Savings bond deductions 1,150 Medical insurance deductions 420 8,782 Net amount 15,418 12. Issued Check No. 822 in payment of the net amount of the biweekly payroll. 12. Journalized the entry to record payroll taxes on employees earnings of December 12: social security tax, 1,452; Medicare tax, 363; state unemployment tax, 315; federal unemployment tax, 90. 15. Issued Check No. 830 to Alvarez Bank for 7,938, in payment of 2,904 of social security tax, 726 of Medicare tax, and 4,308 of employees federal income tax due. 26. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Salary distribution: Operations 14,250 Officers 7,250 Office 2,750 24,250 Deductions: Social security tax 1,455 Medicare tax 364 Federal income tax withheld 4,317 State income tax withheld 1,091 Savings bond deductions 1,150 8,377 Net amount 15,873 Dec. 26. Issued Check No. 840 for the net amount of the biweekly payroll. 26. Journalized the entry to record payroll taxes on employees earnings of December 26: social security tax, 1,455; Medicare tax, 364; state unemployment tax, 150; federal unemployment tax, 40. 30. Issued Check No. 851 for 6,258 to State Department of Revenue, in payment of employees state income tax due on December 31. 31. Issued Check No. 852 to Alvarez Bank for 2,300 to purchase U.S. savings bonds for employees. 31. Paid 55,400 to the employee pension plan. The annual pens1on cost is 65,500. (Record both the payment and the unfunded pension liability.) Instructions 1.Journalize the transactions. 2.Journalize the following adjusting entries on December 31: A. Salaries accrued: sales salaries, 4,275; officers salaries, 2,175; office salaries, 825. The payroll taxes are immaterial and are not accrued. B. Vacation pay, 13,350.arrow_forward
- Module 5 - Practice QuestionMr. Jay Brown is 66 years of age and his 2020 income is made up of employmentincome of $75,800, contributed $6,500 to his RRSP. He also earned interestincome from Guaranteed Investment Certificate (GIC) of $3,700 during 2020 andreceived Old Age Security benefits of $7,400 (because of large business lossesduring the previous two years, no amount was withheld from the OAS payments).Mr. Brown and his family live in Toronto, Ontario. For 2020, Mr. Brown’semployer withheld maximum CPP ($2,898) and EI ($856) contributions. Otherinformation pertaining to 2020 is as follows:1. Mr. Brown’s spouse is 59 years old and qualifies for the disability tax credit.Her income for the year totaled $4,500.2. Mr. and Mrs. Brown have two daughters, Keith, aged 15 and Laura, aged17. Keith had income of $2,700 for the year while Laura had net income of$3,000. In September 2020, Laura began full time attendance at a Canadianuniversity. Mr. Brown paid her tuition fees of $6,000, of…arrow_forwardQUESTION 2 Cedar City issues $2,000,000, 6% revenue bonds were issued at par on April 1, to build a new water line for the water enterprise fund. Interest is payable every six months. What amount of interest expense should be reported for the year ended December 31? $90,000 $120,000 $0 $60,000arrow_forwardrevious 05 Activity 1 Instructions Instructions Set up a timeline to illustrate a Php 200,000 in a 3-year certificate of deposit that pays a guaranteed 4% annually. + Prepare answer Assignment Type: Dronhox.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Corporate Financial AccountingAccountingISBN:9781337398169Author:Carl Warren, Jeff JonesPublisher:Cengage Learning
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781337398169
Author:Carl Warren, Jeff Jones
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Chapter 19 Accounting for Income Taxes Part 1; Author: Vicki Stewart;https://www.youtube.com/watch?v=FMjwcdZhLoE;License: Standard Youtube License