Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter B, Problem 27EB
To determine
Record the transactions of KP Incorporation in T-accounts and describe its effect on assets, liabilities and
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Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account. (Assume a 360-day year when calculating interest.)
Required:
(a)
Determine the due date of the note.
(b)
Determine the maturity value of the note.
(c)
Journalize the entry to record the receipt of the payment of the note at maturity.*
*Refer to the Chart of Accounts for exact wording of account titles.
On June 1, Davis Inc. issued an $89,300, 8%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using a 360-day year, what is
the amount of interest revenue recognized by Garcia in the following year? When required, round your answer to the nearest dollar.
a. $1,806
Ob. $7,144
O c. $595
Od. $1,191
B
On July 1, Year 1, the Barley Company loaned $50,000 to the Jackson Co. The note has a stated interest rate of 10% and will mature on June 30, Year 2. All payments for principal and interest will be received at maturity. How much interest revenue will Barley report on its income statement for the year ended December 31, Year 1?
Chapter B Solutions
Financial Accounting
Ch. B - Indicate whether each of the following accounts...Ch. B - Prob. 2YTCh. B - Prob. 1QCh. B - Prob. 2QCh. B - Prob. 3QCh. B - Prob. 4QCh. B - Prob. 5QCh. B - Prob. 6QCh. B - Prob. 7QCh. B - Prob. 8Q
Ch. B - Prob. 9QCh. B - Prob. 1MCQCh. B - Prob. 2MCQCh. B - Prob. 3MCQCh. B - Prob. 4MCQCh. B - Prob. 5MCQCh. B - Prob. 6MCQCh. B - Prob. 7MCQCh. B - Prob. 8MCQCh. B - Prob. 9MCQCh. B - Prob. 10MCQCh. B - Prob. 1SEACh. B - Prob. 2SEACh. B - Prob. 3SEACh. B - Prob. 4SEACh. B - Prob. 5SEACh. B - Prob. 6SEACh. B - Prob. 7SEACh. B - Prob. 8SEACh. B - Prob. 9SEACh. B - Prob. 10SEBCh. B - Prob. 11SEBCh. B - Prob. 12SEBCh. B - Prob. 13SEBCh. B - Prob. 14SEBCh. B - Prob. 15SEBCh. B - Prob. 16SEBCh. B - Prob. 17SEBCh. B - Prob. 18SEBCh. B - Prob. 19EACh. B - Prob. 20EACh. B - Record transactions to T-accounts and prepare an...Ch. B - Prob. 22EACh. B - Prob. 23EACh. B - Record closing entries and compute net income. (LO...Ch. B - Record journal entries, record adjusting entries,...Ch. B - Record journal entries, post to T-accounts, and...Ch. B - Prob. 27EBCh. B - Prob. 28EBCh. B - Prob. 29EBCh. B - Prob. 30EBCh. B - Prob. 31EBCh. B - Prob. 32EBCh. B - Prob. 33EBCh. B - Prob. 34EBCh. B - Prepare a trial balance and financial statements....Ch. B - Record journal entries, post to T-accounts, and...Ch. B - Prepare closing entries and financial statements....Ch. B - Record adjusting journal entries, post to...Ch. B - Prob. 39PACh. B - Prob. 40PACh. B - Prob. 41PACh. B - Prob. 42PACh. B - Prob. 43PBCh. B - Prob. 44PBCh. B - Prob. 45PBCh. B - Prob. 46PBCh. B - Prob. 47PBCh. B - Prob. 48PBCh. B - Prob. 49PBCh. B - Prob. 50PBCh. B - Prob. 51FSACh. B - Prob. 52CTP
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- Lundquist Company received a 60-day, 4% note for $46,000, dated July 23, from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume 360 days in a year. c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.arrow_forwardOn June 1, Davis Inc. issued an $68,700, 8%, 120-day note payable to Garcia Company Assume that the fiscal year of Garcia ends June 30. Using a 360-day year in your calculations, what is the amount of interest revenue recognized by Garcia in the following year? When required, round your answer to the nearest dollar. a.$916 b.$1,389 c.$5,496 d.$458arrow_forwardOn January 5, Daisy Co., which follows a calendar year accounting, issued $1,000,000 of notes payable of which $250,000 is due on January 1 each of the next four years. What would be the proper balance sheet presentation on December 31? Show the current liabilities and long-term liabilities. a. Current Liabilities; b. Long-Term Debt:arrow_forward
- Danali Corporation borrowed $400,000 on October 1. The note carried a 13 percent interest rate with the principal and interest payable on May 1 of next year. Prepare the following journal entries. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheetarrow_forwardOn July 8, Jones Inc. issued an $76,900, 10%, 120-day note payable to Miller Company. Assume that the fiscal year of Jones ends on July 31. Using the 360-day year, what is the amount of interest expense recognized by Jones in the current fiscal year? Round your answer to the nearest whole dollar. a.$1,068 b.$1,282 c.$491 d.$641arrow_forwardRamsay's Company Statement of Financial Position as at December 31, shows notes payable totaling $115,000 with Rednail Bank. These are 90-day notes, renewable for another 90-day period. These notes should be classified on the statement of financial position of Ramsay Company as Select one: а. non-current liabilities. O b. deferred charges. O c. intermediate debt. O d. current liabilitiesarrow_forward
- On January 1, MM Company borrows $290,000 cash from a bank and in return signs an 4% installment note for five annual payments of $65,142 each. Analyze transactions involving issuance of the note and its first annual payment, by showing their effects on the accounting equation—specifically, identify the accounts and amounts (including + or −) for each transaction.arrow_forwardPrefix Supply Company received a 60-day, 4% note for $46,000 dated July 12 from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume a 360-day year. c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Prefix Supply Company General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 129 Allowance for Doubtful Accounts 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY…arrow_forwardOn June 1, Davis Inc. issued an $84,000, 5%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using 360-day year, what is the amount of interest revenue recognized by Garcia in the following year? a. $700 b. $1,600 c. $1,062 d. $4,200 e. None of the above.arrow_forward
- At the start of the current year, a company issued a $1,000,000 note to a bank. The company must pay the bank $200,000 plus interest each January 1 for the next five years starting at the beginning of next year. The company will report the note payable on its current year's balance sheet as O Current liabilities, $500,000; Long-term Debt, $500,000,0 Current liabilities, $200,000; Long-term Debt, $800,000. O Current liabilities, $800,000; Long term Debt, $200,000. 4 O Current liabilities, $1,000,000. O Long-term debt, $1,000,000.arrow_forwardTangent Company borrowed $100,000 from the bank signing an 8%, 6-month note on September 1. Principal and interest are payable to the bank on March 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on November 30, would be: A) debit Interest Expense, $8,000; credit Interest Payable, $8,000. B) debit Interest Expense, $667; credit Interest Payable, $667. C) No adjusting entry is needed on November 30. D) debit Interest Expense, $2,667; credit Interest Payable, $2,667.arrow_forwardA business issued a 45-day, 4% note for $260,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note on January 1 and (b) the payment of the note at maturity, including interest. Assume a 360-day year. Refer to the Chart of Accounts for exact wording of account titles.arrow_forward
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