C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2015, to advance Jeff$50,000 on a one-year, 8 percent note, with interest to be paid at maturity on February 28, 2016.CSM prepares financial statements on June 30 and December 31.Required:1. Prepare the journal entry that CSM will make when the note is established.2. Prepare the journal entries that CSM will make to accrue interest on June 30 and December 31.3. Prepare the journal entry that CSM will make to record the interest and principal payments onFebruary 28, 2016.

Question

C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2015, to advance Jeff
$50,000 on a one-year, 8 percent note, with interest to be paid at maturity on February 28, 2016.
CSM prepares financial statements on June 30 and December 31.
Required:
1. Prepare the journal entry that CSM will make when the note is established.
2. Prepare the journal entries that CSM will make to accrue interest on June 30 and December 31.
3. Prepare the journal entry that CSM will make to record the interest and principal payments on
February 28, 2016.

Expert Answer

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: A consumer products company reported a 25 percent increase in sales from last year to this year.Sale...

A: Given information is: A consumer products company reported a 25 percent increase in sales from last ...

Q: Which of the following is false regarding the balancesheet?a. The accounts shown on a balance sheet ...

A: Answer: c. The balance sheet summarizes the net changes in specific account balances over a period o...

Q: Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike...

A: Special identification method: The specific identification inventory valuation method is a system fo...

Q: Erkkila Inc. reports that at an activity level of 6,100 machine-hours in a month, its total variable...

A: Variable cost refers to the costs which are varying with the volume of the production. Variable cost...

Q: Requiring that an employee with no access to cash do the accounting is an example ofwhich characteri...

A: Given: The example of a characteristics of an internal control.

Q: Other Responsibilities and Practices Cases. Read the following cases. For each, statewhether the act...

A: a) In this case, R has completed the reviewing the Financial Statements of W. According to Rule 501,...

Q: For each of the following independent situations, prepare journal entries to record the initial tran...

A: a. Hockey Helpers paid $4,000 cash on September 30 to rent an arena for the months of October and No...

Q: Define Audit

A: Normally the term Audit refers to Audit of financial statements.

Q: Hi another question

A: Income statement is one of the essential parts of the financial statement used for reporting the fin...

Q: On January 1, 2020, Kingbird, Inc. purchased 11% bonds having a maturity value of $541,000 for $558,...

A: The following journal entries are passed to show the investment in bonds.

Q: A start-up company often engages in the following transactions during its first year of operations. ...

A: Investing activities:   Investing activities refer to the activities carried out by a company for a...

Q: Ace Company purchases $1,400 of merchandise from Zitco on December 16. Zitco accepts Ace’s $1,400, 9...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: On January 2, 2011, Jansing Corporation acquired a new machine with an estimated useful life of five...

A: Depreciation is the accounting process of converting the original costs of fixed assets such as plan...

Q: Capri Company began the current period with a $20,000 credit balance in the K. Capri, Capital accoun...

A: 1. Calculate the balance of the Income Summary account (net income): Hence, the balance of income s...

Q: S3-5. (Learning Objective 2: Apply the revenue and expense recognition principles)Identify the accou...

A: As more than one question is asked I am providing you answer for first three questions.  

Q: Identify the following as intangible assets (IA), natural resources (NR), or some other asset (O). S...

A: Salt mine is a type of natural resources. 

Q: You work for a made-to-order clothing company, whosereputation is based on its fast turnaround from ...

A: Outsourcing:   It is a form of business arrangement where one company will hire another company to t...

Q: Please answer the Serial questions in the attached files.  Here's the Trial Balance information from...

A: Since there are multiple sub parts in the question, Calculation will be given for first three sub pa...

Q: AXE Co. is the defendant in a lawsuit. AXE reasonably estimates that this pending lawsuit will resul...

A: In order to record a contingent liability as a liability it must be ensured that outflow of resource...

Q: An employee earned $50,000 during the year. FICA tax for Social Security is 6.2% and FICA tax for Me...

A: FICA tax is contributed both the employees and the employer with 6.2% of social security tax till th...

Q: “The principal purpose of the cash budget is to see how much cash the company will have in thebank a...

A: Given statement is: The principal purpose of the cash budget is to see how much cash the company wil...

Q: Which of the following is not included in the standard (unmodified) report on the financialstatement...

A: The purpose behind Auditor's report on the fiscal summary is to give an assessment that whether the ...

Q: Universal Sports Supply began the year with an accounts receivable balance of $200,000 and a year-en...

A: Accounts receivable turnover analyzes the number of times accounts receivables is collected and conv...

Q: Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller)...

A: Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains...

Q: Management and auditor are concerned about segregation of duties in computer based systems? Why? How...

A: The process or technique implemented by an entity to increase the operational efficiency and account...

Q: Biloxi Gifts uses sales journal, purchases journal, cash receipts journal, cash payments journal, an...

A: Given: Purchase of merchandise on credit = $ 2,600 Contribution to automobile = $ 17000 Sold merchan...

Q: Bonds with an 8% stated interest rate were issued when the market rate of interest was 5%.This bond ...

A: Given is: Bonds with an 8% stated interest rate were issued when the market rate of interest was 5%.

Q: Shankar Company uses a perpetual system to record inventory transactions. The company purchases 1,50...

A: Given information is: Shankar Company uses a perpetual system to record inventory transactions. The ...

Q: Accounting Question

A: Definition: Production Cost Report:  A report which gives information about the total units produced...

Q: Adams, Inc. has sales of $100,000 with contribution a contribution margin of $60,000 and net income ...

A: Operating Leverage  Adams,Inc. =3 times Baron, Inc = 2 times

Q: As an auditor for Bernard and Thomas, you are responsible for determining the proper classification ...

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic transaction...

Q: Stephanie's Bridal Shoppe sells wedding dresses. The average selling Price of each dress is $1,000, ...

A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at t...

Q: Identify which of the following items are not included as part of general-purpose financial statemen...

A: Click to see the answer

Q: Jackson Company had the following information in 2018:Accounts receivable 12/31/18.....................

A: Answer:   Option b

Q: Determine whether each characteristic describes a general partnership (GP), limited liability compan...

A: Click to see the answer

Q: Kosher Pickle Company acquires all the outstanding stock of Midwest Produce for $19 million. The fai...

A: Click to see the answer

Q: On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some re...

A: Interest received on Notes = Face value of Notes x rate of interest x time = $11,000 x 9% x 6/12 = $...

Q: Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest paymen...

A: Amortization of bond discounts using Effective Method:   The issuance of bond at a price lower than...

Q: Identify which of the following items are not included as part of general-purpose financial statemen...

A: Financial statements: These are financial reports that helps management in assessing the company's c...