FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
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On December 31, 2023, Bridgeport Co. performed environmental consulting services for Indigo Co. Indigo was short of cash, and
Bridgeport Co. agreed to accept a $165,000 zero-interest-bearing note due December 31, 2025, as payment in full. Indigo is
somewhat of a credit risk and typically borrows funds at a rate of 11%. Bridgeport is much more creditworthy and has various lines of
credit at 6%.
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Prepare the journal entry to record the transaction of December 31, 2023, for Bridgeport Co. (Round present value factor
calculations to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g. 5,275.25. Credit account titles are automatically
indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for
the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
Notes Receivable
Discount on Notes Receivable
Service Revenue
Debit
165000…
(a) On March 1, journalize the entry to record the write-off, assuming that the direct write-off method is used. Refer to the Chart of Accounts for exact wording of account titles.PAGE 1JOURNALACCOUNTING EQUATIONDATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY12(b) On March 1, journalize the entry to record the write-off, assuming that the allowance method is used. Refer to the Chart of Accounts for exact wording of account titles.PAGE 1JOURNALACCOUNTING EQUATIONDATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY12
On July 31, 2025, Sheridan Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery.
Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Sheridan issued a
$296,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $190,400 of the
proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable
securities (trading securities) at 10% until November 1. On November 1, Sheridan made a final $106,000 payment to Minsk. Other
than the note to Netherlands, Sheridan's only outstanding liability at December 31, 2025, is a $31,800, 8%, 6-year note payable, dated
January 1, 2022, on which interest is payable each December 31.
(a)
Your answer is correct.
Calculate weighted average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025.…
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