1.
Concept Introduction: Deferred expenses are advance payments for future expenses. When a business prepays an expense, it can debit an asset account and defer the recognition of the expense. Deferring an expense creates an asset, thus, the account is debited to recognize this prepayment.
The interest expense accrued at December 31, 2024.
2.
Concept Introduction: At the end of the accounting period, adjustments are made to record revenues in the period they are earned and expenses in the period they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.
The
3.
Concept Introduction: At the end of the accounting period, adjustments are made to record revenues in the period they are earned and expenses in the period they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.
The T accounts for passed entries.
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HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
- Arvan Patel is a customer of Banks Hardware Store. For Mr. Patels latest purchase on January 1, 2018, Banks Hardware issues a note with a principal amount of $480,000, 13% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Banks Hardware Store for the following transactions. A. Note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019.arrow_forwardAnderson Air is a customer of Handler Cleaning Operations. For Anderson Airs latest purchase on January 1, 2018, Handler Cleaning Operations issues a note with a principal amount of $1,255,000, 6% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Handler Cleaning Operations for the following transactions. A. Entry for note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019arrow_forwardNon-Interest-Bearing Notes Payable On November 16, 2019, Clear Glass Company borrowed 20,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items Would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Companys effective interest rate?arrow_forward
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- Notes Receivable On September 1, 2016, Dougherty Corp. accepted a six-month, 7%, $45,000 interest-bearing note from Rozelle Company in payment of an account receivable. Doughertys year-end is December 31. Rozelle paid the note and interest on the due date. Required Who is the maker and who is the payee of the note? What is the maturity date of the note? Prepare all necessary journal entries that Dougherty needs to make in connection with this note.arrow_forwardKingbird Corporation issued $460,000, 8%, 20-year bonds on January 1, 2022, for $418,008. This price resulted in an effective- interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective-interest method to amortize bond premium or discount. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date Jan. 1, 2022 Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Debit 418008 41992 Credit 460000arrow_forwardAdjusting journal entry for: On November 1st, 2018, FTS purchased a certificate of deposit from First National Bank for $25,000. The deposit earns interest of 2.0% annually and has a maturity end date of 11/1/2020. Interest earned is received annually on November 1st of each year.arrow_forward
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