Question

3. 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.
Instructions:
a. Prepare journal entries (in general journal form) to record the above transactions. Use a 360-day year in making the interest calculations

Expert Answer

1 Rating

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Financial Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Classify each of the following items as revenues (R), expenses (EX), or withdrawals (W). Service rev...

A: Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by...

Q: Im always stuck on my homework because im not sure how to calculate the order of operations in my ca...

A: Definition: Present value: Present value refers to the present worth of the money that is received i...

Q: Companies often are under pressure to meet or beat Wall Street earnings projections in order to incr...

A: 1.  

Q: Define Cash Equivalents

A: Cash and cash equivalents refer to the line item on the balance sheet that reports the value of a co...

Q: Allerton Company acquires all of Deluxe Company’s assets and liabilities for cash on January 1, 2018...

A: Goodwill = Fair value of consideration transferred - Fair value of net identifiable assets Gain on b...

Q: Jeff Heun, president of Pina Always, agrees to construct a concrete cart path at Dakota Golf Club. P...

A: Transaction price:   Transaction price is the amount of consideration that is estimated by the compa...

Q: Match the ratio to the building block of financial statement analysis to which it best relates.A. Li...

A: Times interest earned ratio is used to measure ability of the company to pay it's debt payment.  Tim...

Q: All of the following are controls for cash received over the counter excepta. a printed receipt must...

A: Correct option to the above question is d. The sales clerk must have access to the cash register tap...

Q: At December 31, Hawke Company reports the following results for its calendar year. In addition, its ...

A: 1. Prepare the adjusting entry to record bad debts under each separate assumption. a. Bad debts are ...