Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 2, Problem 44PB
1.
To determine
Prepare
2.
To determine
Prepare the income statement, statement of changes in shareholders’ equity,
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following items were selected from among the transactions completed by Aston Mar-tin Inc. during the current year:
Apr. 15. Borrowed $225,000 from Audi Company, issuing a 30-day, 6% note for that amount.
May 1. Purchased equipment by issuing a $320,000, 180-day note to Spyder Manufacturing Co., which discounted the note at the rate of 6%.
15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% note for $225,000. (Record both the debit and credit to the notes payable account.)
July 14. Paid Audi Company the amount due on the note of May 15.
Aug. 16. Purchased merchandise on account from Exige Co., $90,000, terms, n/30.
Sept. 15. Issued a 45-day, 6% note for $90,000 to Exige Co., on account.
Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1.
30. Paid Exige Co. the amount owed on the note of September 15.
Nov. 16. Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a…
Egnab Inc. had the following transactions during the current fiscal year ending December 31 .
August 01. They borrowed $100,000 from Valley Bank, signing a 90-days, 7.50% Note Payable.
October 15. Egnab Inc. purchased a truck from Trusty Cars for $29,500. Trusty Cars agreed to accept, as full payment, a 5.00%, two months Note for the invoice amount.
November 1 Egnab Inc. paid Valley Bank the Note Payable plus the accrued interest.
November 15. Egnab Inc. purchased merchandise (inventory) from Easy Food Corp. for $13,900. Easy Food Corp. accepted a 120-days, 6.50% Note as full settlement of the purchase.
December 15. The Note Payable to Trusty Cars matured today and Egnab Inc. paid the accrued interest as well as 70.00% of the Note Payable. For the remaining amount, a new Note was issued for 45-days with 9.00% Interest.
(show your calculations and round to 2 decimal places, please)


(a) Prepare Journal Entries to record the above transactions. Use a 360-day year in making the Interest…
Jamaica Corporation carried out the following transactions involving note payable. During the fiscal year ended December 31, 2020.
Aug 6Â Â Â Â Â Borrowed $ 15,200 from Tony Stark, issuing to him a 45 da, 14% note payable.
Sept. 16Â Â Purchased office equipment from Ikea Company. The invoice amount was $18,800 and Ikea Company agreed to accept as full payment a 3-month, 15% note for the invoice amount.
Sept. 20Â Â Paid Tony Stark note plus accrued interest.
Nov.1     Borrowed $ 2,35,000 from Nation Commercial Bank at an interest rate of 12% per annum; signed a 90-days note payable for $ 2,42,256, which included a $7,056 interest charge in the face amount.
Dec.1Â Â Â Â Â Purchased merchandise in the amount of $13,000 from Stephens & Co. Gave in settlement a 60-day note nearing interest at 15% (Perpetual inventory system is deployed).
Dec. 16  The $18,800 note payable to Ikea Company matured today. Paid the interest accrued and issued new 30-days, 12% note to replace the maturing note.…
Chapter 2 Solutions
Financial Accounting
Ch. 2 - Prob. 1YTCh. 2 - Prob. 2YTCh. 2 - Is prepaid insurance an expense or an asset?...Ch. 2 - Prob. 4YTCh. 2 - Give an example of the matching principle from the...Ch. 2 - What is the difference between cash basis and...Ch. 2 - Prob. 7YTCh. 2 - What is GAAP? What is IFRS?Ch. 2 - Prob. 2QCh. 2 - Prob. 3Q
Ch. 2 - Prob. 4QCh. 2 - Prob. 5QCh. 2 - What are the four basic financial statements?Ch. 2 - Which financial statement pertains to a single...Ch. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - What does recognize revenue mean in accounting?Ch. 2 - Prob. 14QCh. 2 - What is an accrual? What is a deferral?Ch. 2 - Must a company collect the money from a sale...Ch. 2 - What is the cost of goods sold?Ch. 2 - Explain the difference between cash basis...Ch. 2 - Prob. 19QCh. 2 - Prob. 20QCh. 2 - Prob. 21QCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 6MCQCh. 2 - Prob. 7MCQCh. 2 - Prob. 8MCQCh. 2 - Prob. 9MCQCh. 2 - Prob. 10MCQCh. 2 - Elements of the financial statements. (LO 3). For...Ch. 2 - Prob. 2SEACh. 2 - Prob. 3SEACh. 2 - Prob. 4SEACh. 2 - Prob. 5SEACh. 2 - Prob. 6SEACh. 2 - Cash versus credit sales. (LO 3, 4). Company A had...Ch. 2 - Prob. 8SEACh. 2 - Prob. 9SEACh. 2 - Prob. 10SEACh. 2 - Prob. 11SEBCh. 2 - Prob. 12SEBCh. 2 - Prob. 13SEBCh. 2 - Prob. 14SEBCh. 2 - Prob. 15SEBCh. 2 - Prob. 16SEBCh. 2 - Prob. 17SEBCh. 2 - Prob. 18SEBCh. 2 - Prob. 19SEBCh. 2 - Prob. 20SEBCh. 2 - Prob. 21EACh. 2 - Prob. 22EACh. 2 - Prob. 23EACh. 2 - Balance sheet and income statement transactions....Ch. 2 - Prob. 25EACh. 2 - Prob. 26EACh. 2 - Prob. 27EACh. 2 - Prob. 28EACh. 2 - Elements of the financial statements. (LO 3). The...Ch. 2 - Prob. 30EBCh. 2 - Elements of the financial statements. (LO 3)....Ch. 2 - Prob. 32EBCh. 2 - Prob. 33EBCh. 2 - Prob. 34EBCh. 2 - Prob. 35EBCh. 2 - Current ratio. (LO 5). The following data was...Ch. 2 - Prob. 37PACh. 2 - Prob. 38PACh. 2 - Prob. 39PACh. 2 - Prob. 40PACh. 2 - Prob. 41PACh. 2 - Prob. 42PBCh. 2 - Prob. 43PBCh. 2 - Prob. 44PBCh. 2 - Prob. 45PBCh. 2 - Prob. 46PBCh. 2 - Prob. 1FSACh. 2 - Prob. 2FSACh. 2 - Prob. 3FSA
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
- The following items were selected from among the transactions completed by Aston Martin Inc. during the current year: Apr. 15. Borrowed $225,000 from Audi Company, issuing a 30-day, 6% note for that amount. May 1. Purchased equipment by issuing a $320,000, 180-day note to Spyder Manufacturing Co., which discounted the note at the rate of 6%. 15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% note for $225,000. (Record both the debit and credit to the notes payable account.) July 14. Paid Audi Company the amount due on the note of May 15. Aug. 16. Purchased merchandise on account from Exige Co., $90,000, terms, n/30. Sept. 15. Issued a 45-day, 6% note for $90,000 to Exige Co., on account. Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1. 30. Paid Exige Co. the amount owed on the note of September 15. Nov. 16. Purchased store equipment from Gallardo Co. for $450,000, paying $50,000…arrow_forwardduring the fiscal year ended december 31, duckworth corporation engaged in the following transactions involving notes payable: sept. 16. purchased office equipment from earthtime equipment. the invoice amount was $24,000, and earthtime agreed to accept, as full payment, on 12%, three-month note for the invoice amount. nov. 1. borrowed $100,000 from sandra duckworth, a major corporate stockholder. the corporation issued duckworth a $100,000, 15%, 120-day note payable. dec. 1. purchased merchandise inventory in the amount of $5,000 from teller corporation. teller accepted a 90-day, 14% note as a full settlement of the purchase. duckworth corporation uses a perpetual inventory system. dec. 16. the $24,000 note payable to earthtime equipment matured today. duckworth paid the accrued interest on this note and issued a new 30-day, 16% note payable in the amount of $24,000 to replace the note that matured. instructions: a. prepare journal entries (in general journal form) to record the above…arrow_forwardThe following items were selected from among the transactions completed by Aston Martin Inc. during the current year:Apr. 15. Borrowed $225,000 from Audi Company, issuing a 30-day, 6% note for that amount.May 1. Purchased equipment by issuing a $320,000, 180-day note to Spyder Manufacturing Co., which discounted the note at the rate of 6%.15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% note for $225,000. (Record both the debit and credit to the notes payable account.)July 14. Paid Audi Company the amount due on the note of May 15.Aug. 16. Purchased merchandise on account from Exige Co., $90,000, terms, n/30.Sept. 15. Issued a 45-day, 6% note for $90,000 to Exige Co., on account.Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1.30. Paid Exige Co. the amount owed on the note of September 15.Nov. 16. Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a series of…arrow_forward
- During the fiscal year ended December 31, Duckworth Corporation engaged in the following transactions involving notes payable: Sept. 16. Purchased office equipment from Earthtime Equipment. The invoice amount was $24,000, and Earthtime agreed to accept, as full payment, on 12%, three-month note for the invoice amount. Nov. 1. Borrowed $100,000 from Sandra Duckworth, a major corporate stockholder. The corporation issued Duckworth a $100,000, 15%, 120-day note payable. Dec. 1. Purchased merchandise inventory in the amount of $5,000 from Teller Corporation. Teller accepted a 90-day, 14% note as a full settlement of the purchase. Duckworth Corporation uses a perpetual inventory system. Dec. 16. The $24,000 note payable to Earthtime Equipment matured today. Duckworth paid the accrued interest on this note and issued a new 30-day, 16% note payable in the amount of $24,000 to replace the note that matured.arrow_forwardOn December 1, Williams Company borrowed $45,000 cash from Second National Bank by signing a 90-day, 9% note payable. a. Prepare Williams' journal entry to record the issuance of the note payable. b. Prepare Williams' journal entry to record the accrued interest due at December 31. c. Prepare Williams' journal entry to record the payment of the note on March 1 of the next year.arrow_forwardJames Howard owns Howard Auto Sales. He periodically borrows money from Bay City State Bank and Trust. He permits some customers to sign short-term notes for their purchases. He usually discounts these notes at the bank. Following are selected transactions that occurred in March 20X1. DATE  TRANSACTIONS 20X1  Mar. 4  Mr. Howard borrows $20,000 from the bank on a note payable for the business. Terms of the note are 8 percent interest for 45 days.  11  A 90-day $18,000 note payable to the bank is discounted at a rate of 10 percent.  22  Sold a car to Darnell Jones for $30,000 on a 75-day note receivable, bearing interest at 10 percent.  23  Discounted the Jones note with the bank. The bank charges a discount rate of 12 percent.  25  Sold a car for $30,000 to Henry Thomas. Thomas paid $4,000 cash and signed a 30-day note, bearing interest at 10 percent, for the balance.  28  Alfred Herron's account receivable is overdue. Howard requires him to sign a 12…arrow_forward
- James Howard owns Howard Auto Sales. He periodically borrows money from Bay City State Bank and Trust. He permits some customers to sign short-term notes for their purchases. He usually discounts these notes at the bank. Following are selected transactions that occurred in March 20X1. DATE  TRANSACTIONS 20X1  Mar. 4  Mr. Howard borrows $20,000 from the bank on a note payable for the business. Terms of the note are 8 percent interest for 45 days.  11  A 90-day $18,000 note payable to the bank is discounted at a rate of 10 percent.  22  Sold a car to Darnell Jones for $30,000 on a 75-day note receivable, bearing interest at 10 percent.  23  Discounted the Jones note with the bank. The bank charges a discount rate of 12 percent.  25  Sold a car for $30,000 to Henry Thomas. Thomas paid $4,000 cash and signed a 30-day note, bearing interest at 10 percent, for the balance.  28  Alfred Herron's account receivable is overdue. Howard requires him to sign a 12…arrow_forwardLeach Company borrowed $95,000 cash by issuing a note payable on June 1, Year 1. The note had an 6 percent annual rate of interest and a one-year term to maturity. Required: a. What amount of interest expense will Leach recognize for the year ending December 31, Year 1? b. Record the issue of notes payable and recognition of interest on December 31, Year 1, in the accounting equation for Year 1. c. What amount of cash will Leach pay for interest expense in Year 1? d. What is the amount of interest payable as of December 31, Year 1? e. What amount of cash will Leach pay for interest expense in Year 2? f. What amount of interest expense will Leach recognize in Year 2? g. What is the amount of interest payable as of December 31, Year 2? -arrow_forwardJames Howard owns Howard Auto Sales. He periodically borrows money from Bay City State Bank and Trust. He permits some customers to sign short-term notes for their purchases. He usually discounts these notes at the bank. Following are selected transactions that occurred in March 20X1. DATE  TRANSACTIONS 20X1  Mar. 4  Mr. Howard borrows $20,000 from the bank on a note payable for the business. Terms of the note are 8 percent interest for 45 days.  11  A 90-day $18,000 note payable to the bank is discounted at a rate of 10 percent.  22  Sold a car to Darnell Jones for $30,000 on a 75-day note receivable, bearing interest at 10 percent.  23  Discounted the Jones note with the bank. The bank charges a discount rate of 12 percent.  25  Sold a car for $30,000 to Henry Thomas. Thomas paid $4,000 cash and signed a 30-day note, bearing interest at 10 percent, for the balance.  28  Alfred Herron's account receivable is overdue. Howard requires him to sign a 12…arrow_forward
- James Howard owns Howard Auto Sales. He periodically borrows money from Bay City State Bank and Trust. He permits some customers to sign short-term notes for their purchases. He usually discounts these notes at the bank. Following are selected transactions that occurred in March 20X1. DATE  TRANSACTIONS 20X1  Mar. 4  Mr. Howard borrows $20,000 from the bank on a note payable for the business. Terms of the note are 8 percent interest for 45 days.  11  A 90-day $18,000 note payable to the bank is discounted at a rate of 10 percent.  22  Sold a car to Darnell Jones for $30,000 on a 75-day note receivable, bearing interest at 10 percent.  23  Discounted the Jones note with the bank. The bank charges a discount rate of 12 percent.  25  Sold a car for $30,000 to Henry Thomas. Thomas paid $4,000 cash and signed a 30-day note, bearing interest at 10 percent, for the balance.  28  Alfred Herron's account receivable is overdue. Howard requires him to sign a 12…arrow_forwardJames Howard owns Howard Auto Sales. He periodically borrows money from Bay City State Bank and Trust. He permits some customers to sign short-term notes for their purchases. He usually discounts these notes at the bank. Following are selected transactions that occurred in March 20X1. DATE  TRANSACTIONS 20X1  Mar. 4  Mr. Howard borrows $20,000 from the bank on a note payable for the business. Terms of the note are 8 percent interest for 45 days.  11  A 90-day $18,000 note payable to the bank is discounted at a rate of 10 percent.  22  Sold a car to Darnell Jones for $30,000 on a 75-day note receivable, bearing interest at 10 percent.  23  Discounted the Jones note with the bank. The bank charges a discount rate of 12 percent.  25  Sold a car for $30,000 to Henry Thomas. Thomas paid $4,000 cash and signed a 30-day note, bearing interest at 10 percent, for the balance.  28  Alfred Herron's account receivable is overdue. Howard requires him to sign a 12…arrow_forwardJames Howard owns Howard Auto Sales. He periodically borrows money from Bay City State Bank and Trust. He permits some customers to sign short-term notes for their purchases. He usually discounts these notes at the bank. Following are selected transactions that occurred in March 20X1. DATE  TRANSACTIONS 20X1  Mar. 4  Mr. Howard borrows $20,000 from the bank on a note payable for the business. Terms of the note are 8 percent interest for 45 days.  11  A 90-day $18,000 note payable to the bank is discounted at a rate of 10 percent.  22  Sold a car to Darnell Jones for $30,000 on a 75-day note receivable, bearing interest at 10 percent.  23  Discounted the Jones note with the bank. The bank charges a discount rate of 12 percent.  25  Sold a car for $30,000 to Henry Thomas. Thomas paid $4,000 cash and signed a 30-day note, bearing interest at 10 percent, for the balance.  28  Alfred Herron's account receivable is overdue. Howard requires him to sign a 12…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
IAS 29 Financial Reporting in Hyperinflationary Economies: Summary 2021; Author: Silvia of CPDbox;https://www.youtube.com/watch?v=55luVuTYLY8;License: Standard Youtube License