Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 4, Problem 4.6.5AAP
To determine
Concept Introduction:
To Identify: Adjustment for interest expenses on 30th June 2017.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On July 1, 2016, Ross-Livermore Industries issued nine-month notes in the amount of $400 million. Interest is payable at maturity. Required: Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions: Interest Rate Fiscal Year-End 1. 12% December 31 2. 10% September 30 3. 9% October 31 4. 6% January 31
Recording Accrued Interest Expense
Alaska Inc. borrowed $16,000 by signing a one-year note payable on November 1, 2020. The note bears interest at 10% and interest is payable upon maturity of the note.
a. Record this financing transaction on November 1, 2020.
b. Record the year-end adjusting entry required on December 31, 2020. Hint: Prorate the annual interest of 10% for two months.
c. Record the entry to repay the note on November 1, 2021.
Note: Round your answers to the nearest dollar. For example, enter 50 for 50.49 and enter 51 for 50.5
Consider the following note payable transactions of Caleb Video Productions.
2018
Oct. 1
Purchased equipment costing $80,000 by issuing a five-year, 8% note payable. The note requires annual principal payments of $16,000 plus interest each October 1.
Dec. 31
Accrued interest on the note payable.
2019
Oct. 1
Paid the first installment on the note.
Dec. 31
Accrued interest on the note payable.
Requirements
Journalize the transactions for the company.
Chapter 4 Solutions
Using Financial Accounting Information
Ch. 4 - Revenue Recognition The highway department...Ch. 4 - Prob. 4.2.1ECh. 4 - Prob. 4.2.2ECh. 4 - Prob. 4.2.3ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6.1ECh. 4 - Prob. 4.6.2ECh. 4 - Prob. 4.6.3E
Ch. 4 - Prob. 4.6.4ECh. 4 - Prob. 4.7.1ECh. 4 - Prob. 4.7.2ECh. 4 - Prob. 4.8.1ECh. 4 - Prob. 4.8.2ECh. 4 - Prob. 4.8.3ECh. 4 - Prob. 4.8.4ECh. 4 - Prob. 4.8.5ECh. 4 - Prob. 4.9.1ECh. 4 - Working Backward: Depreciation Polk Corp....Ch. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.12.1ECh. 4 - Prob. 4.12.2ECh. 4 - Prob. 4.12.3ECh. 4 - Prob. 4.13.1ECh. 4 - Prob. 4.13.2ECh. 4 - Prob. 4.13.3ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15.1ECh. 4 - Prob. 4.15.2ECh. 4 - Prob. 4.15.3ECh. 4 - Prob. 4.15.4ECh. 4 - Prob. 4.15.5ECh. 4 - Prob. 4.16.1ECh. 4 - Prob. 4.16.2ECh. 4 - Prob. 4.16.3ECh. 4 - Prob. 4.17.1ECh. 4 - Prob. 4.17.2ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.19.1ECh. 4 - Prob. 4.19.2ECh. 4 - Prob. 4.20.1ECh. 4 - Prob. 4.20.2ECh. 4 - Prob. 4.20.3ECh. 4 - Prob. 4.21.1ECh. 4 - Prob. 4.21.2ECh. 4 - Prob. 4.22ECh. 4 - The Effect of Ignoring Adjustments on Net Income...Ch. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26.1MCECh. 4 - Prob. 4.26.2MCECh. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Prob. 4.28.1MCECh. 4 - Prob. 4.28.2MCECh. 4 - Prob. 4.1.1PCh. 4 - Prob. 4.1.2PCh. 4 - Prob. 4.2.1PCh. 4 - Prob. 4.2.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4.1PCh. 4 - Prob. 4.4.2PCh. 4 - Prob. 4.5.1PCh. 4 - Prob. 4.5.2PCh. 4 - Prob. 4.5.3PCh. 4 - Prob. 4.6.1PCh. 4 - Prob. 4.6.2PCh. 4 - Prob. 4.6.3PCh. 4 - Prob. 4.6.4PCh. 4 - Prob. 4.6.5PCh. 4 - Prob. 4.6.6PCh. 4 - Prob. 4.7.1PCh. 4 - Prob. 4.7.2PCh. 4 - Prob. 4.8MCPCh. 4 - Prob. 4.9.1MCPCh. 4 - Prob. 4.9.2MCPCh. 4 - Monthly Transactions, Adjustments, and Financial...Ch. 4 - Prob. 4.9.4MCPCh. 4 - Prob. 4.9.5MCPCh. 4 - Prob. 4.1.1AAPCh. 4 - Prob. 4.1.2AAPCh. 4 - Prob. 4.2.1AAPCh. 4 - Prob. 4.2.2AAPCh. 4 - Prob. 4.3AAPCh. 4 - Use of Account Balances as a Basis for Annual...Ch. 4 - Prob. 4.4.2AAPCh. 4 - Prob. 4.5.1AAPCh. 4 - Prob. 4.5.2AAPCh. 4 - Prob. 4.6.1AAPCh. 4 - Prob. 4.6.2AAPCh. 4 - Prob. 4.6.3AAPCh. 4 - Prob. 4.6.4AAPCh. 4 - Prob. 4.6.5AAPCh. 4 - Prob. 4.6.6AAPCh. 4 - Prob. 4.7.1AAPCh. 4 - Prob. 4.7.2AAPCh. 4 - Prob. 4.8AAMCPCh. 4 - Prob. 4.9.1AAMCPCh. 4 - Prob. 4.9.2AAMCPCh. 4 - Prob. 4.9.3AAMCPCh. 4 - Prob. 4.9.4AAMCP
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
- Anderson 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_forwardOn January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)arrow_forwardOn September 1, 2015, Newtown borrowed $250,000 from First National Bank, and signed a 9% note payable due in one year. Interest on the note is due at maturity. Required: Please show calculations Part a. Prepare the journal entry to record the borrowing transaction. Part b. Prepare the required adjusting entry on December 31, 2015. Part c. Prepare the journal entry to record the payment of the interest on September 1, 2016. Part d. Prepare the journal entry to record the payment of the note on September 1, 2016.arrow_forward
- Instructions Ellsworth Enterprises borrowed $486,000 on an 12%, interest-bearing note on September 30, 2020. Ellsworth ends its fiscal year on December 31. The note was paid with interest on March 31, 2021. Required: 1. Prepare the entry for this note on September 30, 2020. 2. Prepare the adjusting entry for this note on December 31, 2020. 3. Indicate how the note and the accrued interest would appear on the balance sheet at December 31, 2020. 4. Prepare the entry to record the repayment of the note on March 31, 2021.arrow_forwardRecording and Assessing the effect of installment loansOn December 31, 2015, Dehning Inc. borrowed $500,00 on 8%, 10 year - mortgage note payable. The note is to be repaid inn equal quarterly installments of $18,278 (beginning March 31, 2016).a. Prepare journal entries to reflect (1) the issuance of the mortgage note payable, (2) the payment of the first installment on March 31, 2016, and (3) the payment of the second installment on June 30, 2016. Round amounts to the nearest dollar. b. Post the journal entries of part a to their respective T accountsc. Record each of the transactions from part a in the financial statement effect templatearrow_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
- On July 1, 2018, Ross-Livermore Industries issued nine-month notes in the amount of $400 million. Interest ispayable at maturity.Required:Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of thefollowing independent assumptions:Interest Rate Fiscal Year-End1. 12% December 312. 10% September 303. 9% October 314. 6% January 31The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year endson December 31arrow_forwardConsider the following note payable transactions of Creative Video Productions. 2017 Aug. 1 Purchased equipment costing $16,000 by issuing a one-year, 9% note payable. Dec. 31 Accrued interest on the note payable. 2018 Aug. 1 Paid the note payable plus interest at maturity. Journalize the transactions for the company.arrow_forwardBrooks Inc. issued a $220,000, six-month, 6% note to purchase equipment on August 1, 2022. Brooks Inc's fiscal year end is September 30. The journal entry to record unpaid, accrued interest as of September 30, 2022 is: Interest expense 6,600 Interest payable 6,600 Interest expense 13,200 Interest payable 13,200 Interest expense 2,200 Interest payable 2,200arrow_forward
- Consider the following note payable transactions of Cigliano Video Productions. 2017 May 1 Purchased equipment costing $30,000by issuing a one-year, 3% note payable. Dec. 31 Accrued interest on the note payable. 2018 May 1 Paid the note payable plus interest at maturity.arrow_forwardThe following amortization schedule indicates the interest and principal that Chip's Cookie Corporation (CCC) must repay on an installment note established January 1, 2021. CCC has a December 31 year-end and makes the required annual payments on December 31. Year 1 2 3 4 Total Beginning Notes Payable 52,000 40,629 28, 235 14,725 Repaid Principal Interest Expense on Notes Payable (a) Annual Payment (b) Interest Expense (c) Notes Payable (d-1) Total Interest (d-2) Total Principal 4,680 3,657 2,541 1,325 12, 203 11,371 12,394 13,510 14,725 52,000 Ending Notes Payable 40,629 28,235 14,725 0 Use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of interest expense to report in the year ended December 31, 2021 (Year 1); (c) the note payable balance at January 1, 2024; and (d) the total interest and total principal paid over the note's entire life. (Round your answers to the nearest whole dollar amount.)arrow_forwardThe following amortization schedule indicates the interest and principal that Chip’s Cookie Corporation (CCC) must repay on an installment note established January 1, 2021. CCC has a December 31 year-end and makes the required annual payments on December 31. Year Beginning Notes Payable Interest Expense Repaid Principal on Notes Payable Ending Notes Payable 1 39,000 2,730 8,784 30,216 2 30,216 2,115 9,399 20,817 3 20,817 1,457 10,057 10,760 4 10,760 753 10,760 0 Total 7,055 39,000 Use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of interest expense to report in the year ended December 31, 2021 (Year 1); (c) the note payable balance at January 1, 2024; and (d) the total interest and total principal paid over the note’s entire life. (Round your answers to the nearest whole dollar amount.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
7.2 Ch 7: Notes Payable and Interest, Revenue recognition explained; Author: Accounting Prof - making it easy, The finance storyteller;https://www.youtube.com/watch?v=wMC3wCdPnRg;License: Standard YouTube License, CC-BY