Connors Company paid $700 cash to make a repair on equipment it sold under a oneyear warranty in the prior year. The entry to record the payment will debita. Accrued Warranty Payable and creditCash.b. Operating Expense and credit Cash.
Q: Sunland Company borrows $47,600 on July 1 from the bank by signing a $47,600, 13%, one-year note…
A: The journal entries are prepared to keep the record of day to day transactions of the business on…
Q: On Aug 1, ABC received a 60 day, 10% note for 12,000 from McAnn’s Auto in settlement of an existing…
A: Date Accounts and Explanation Debit Credit Aug. 1 Notes Receivable 12,000…
Q: As promise for future payment, Carlock Systems received a six-month, 12% note for $50,000 from a…
A: Interest revenue = Notes receivables x rate of interest x months/12
Q: On October 1st, a company borrowed $60,000 from Eighth National Bank on a 1-year, 7% note. If the…
A: Adjusting entries are entries that are passed at the end of the period to accurately present income,…
Q: Dorman Company had the following items to report on its balance sheet: Employee advances $ 1,580…
A: What amount should appear in the "Other Receivables" category?
Q: On November 1, Lee Corporation borrowed 10,000 by signing a six-month 5% bank loan payable. On this…
A: When a loan is borrowed which is a liability, Loan Payable A/c will be credited by the amount of the…
Q: On December 1, Williams Company borrowed $50,000 cash from Second National Bank by signing a 90-day.…
A: Note payable is a form of debt taken by the company on which business has to pay interest on…
Q: A company borrowed 20.000 TL from the bank signing a 9%, 3-month note on September 1. Principal and…
A: >The adjusting entries are made at the end of period to provide for correct balances for various…
Q: On September 21, the firm received a 6% 90-day note for money lent to Ling Ying Wei amounting to…
A: Lets understand the basics. Adjustment entry is need to pass to record correct amount of revenue and…
Q: On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu…
A: Calculate the interest amount as follows: Interest = Face value * Interest rate*Periods
Q: Following are the five events of DDT CORPORATION: a. On December 31, purchased a machinery at a…
A: Current Liabilities: Current liabilities are the short term liabilities which are due within twelve…
Q: FDNACCT Co. purchased merchandise and issued a twelve-month promissory note with 8% interest and…
A: Journal Entries - Journal Entries are the recording of transactions of the organization. It is…
Q: A company sells its product subject to a warranty that covers the cost of parts for repairs during…
A: Warranty Liability: Estimated liability is an exact dollar amount of debt or obligation which is…
Q: A business borrowed $59,037 on March 1 of the current year by signing a 30 day, 11% interest bearing…
A: The entry to record the payment should include Debit to Interest Expenses for $541.
Q: Concord Company borrows $52,800 on July 1 from the bank by signing a $52,800, 12%, one-year note…
A: Journal: Journal is the book of original entry. Journal consists of the day-to-day financial…
Q: during the fiscal year ended december 31, duckworth corporation engaged in the following…
A: Notes payable is a written document issued by borrower of money to the lender promising to pay money…
Q: Keesha Company borrows $290,000 cash on December 1 of the current year by signing a 180-day, 8%,…
A: Solution: To borrow cash, business issues notes payable that contain principal amount of note,…
Q: Hanna Company reported warranty expense of P1,900,000 for the current year. The warranty liability…
A: Accounting: Accounting is the art of recording, classifying and summarizing in a significant…
Q: Hanna Company borrows $80,000 on July 1 from the bank by signing an $80,000, 10% one year note…
A: Journal: Journal is the book of original entry. Journal consists of the day-to-day financial…
Q: Concord Company borrows $61,200 on July 1 from the bank by signing a $61,200, 10%, one-year note…
A: Interest accrued on december 31 = Amount borrowed x rate of interest x No. of months / 12 = $61,200…
Q: During the first year of operations, a company granted warranties on its products at an estimated…
A: The warranty expenses refer to the amount of expenses which are incurred or expected to be incurred…
Q: On September 1, 20X1, Chabon Corp. purchased machinery costing $20,000 by issuing a 12-month, 12%,…
A: Lets understand the basics. Management some time purchase asset using the loan. In that case if loan…
Q: At the beginning of April of the current year, Nickel Pork Corp. borrowed 1,000,000 for 1 yr from…
A: Part (1) Date Particulars Amount (Dr) Amount (Cr) 01-Apr Bank A/c Dr 880100 Finance…
Q: need help with 1D, Feb 14.! Received Todd’s payment of principal and interest on the note dated…
A: As per the accrual principal, revenue and expenses need to be accounted in the period in which they…
Q: Hadley Industries warrants its products for one year. The estimated product warranty expense is 4%…
A: Estimated warranty expenses = Sales x 4% = $210,000 x 4% = $8,400
Q: On Jan 1, 20X1 received a 3-year interest bearing note collectible in 6 equal semi-annual periods.…
A: Note Receivable- Notes receivable are written promissory notes that allow you to collect a specific…
Q: Egnab Inc. had the following transactions during the current fiscal year ending December 31 .…
A: Notes Payable Long-term obligations known as notes payable represent the sums that a firm owes its…
Q: During the fiscal year ended December 31, Duckworth Corporation engaged in the following…
A: Note payable: It can be defined as a liability in written form that contains a promise to repay a…
Q: Maas, Incorporated, sells washers and dryers that include a maximum one-year warranty covering…
A: Total estimated warranty liability = 2% * Net sales Total estimated warranty liability = 2% *…
Q: OJO Company obtained a loan from a Rural Bank for P420,000 on November 16, 2020. On the same date,…
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…
Q: The following selected transactions are from Garcia Company. Year 1 Dec. 16 Accepted a $20,400,…
A: General Journl Date General Journal Debit Credit Year 1 Dec 16 Note receivable - Rita…
Q: During Year 1, a company accepts the following notes receivable. 1. On April 1, the company provides…
A: Journals are the books of primary entries. The business transactions are recorded at the initial…
Q: The following transactions are from Ohlm Company. (Use 360 days a year.) Year 1 Dec. 16…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: On June 1, Davis Inc. issued an $84,000, 5%, 120-day note payable to Garcia Company. Assume that the…
A: Solution: Days in current year = June 30 - June 1 = 29 days Days in following year = 120 - 29 = 91…
Q: On July 8, Jones Inc. issued an $69,300, 6%, 120-day note payable to Miller Company. Assume that the…
A: Notes payable is a negotiable instrument signed by the promisor who agreed to pay a certain amount…
Q: Johnson Inc. has the following information available: On November 1, 20X1, Johnson lent $15,000…
A: Promissory note :— It is a written financial document that promises to repay the borrowed money. In…
Q: Lundquist Company received a 60-day, 9% note for $28,000, dated July 23, from a customer on…
A: Note receivable: Note receivable refers to a written promise received by the creditor from the…
Q: CPA Co. received from a customer a one-year, P1,000,000 note bearing annual interest of 10%. After…
A: Factoring is the financial institution where firm can sell their account receivable at a discount…
Q: Following are the five events of DDT CORPORATION: a. On December 31, purchased a machinery at a…
A: Long-term liabilities refers to those financial obligations of a company which have a due date of…
Q: On December 1, a company signed a $6,000, 90-day, 5% note payable, with principal plus interest due…
A: Answer: Option b.
Q: Hadley Industries warrants its products for one year. The estimated product warranty expense is 4%…
A: Estimated warranty liability = 4% of sales = $210000 x 4%…
Q: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume 360…
A: Note receivable: Note receivable refers to a written promise received by the creditor from the…
Q: XYZ Corporation maintains its book on a cash basis. During 2021, the company collected $950,000 in…
A: Sales Revenue : (Accounts Receivable, Ending + Cash collection) - Accounts Receivable, Beginning =…
Q: The following transactions occurred during December 31, 2021, for the Microchip Company. On…
A: Interest=$90,000×8%×312=$1,800
Q: The following transactions are from Ohlm Company. (Use 360 days a year.) Year 1 December 16 Accepted…
A: 1. Interest Recognition - Interest is the income earned by the issuer of the notes on the account.…
Q: On September 15, Jas Motor Service Center issued a 90-day, 18% note amounting to P10,000 for a loan…
A: The entries are passed in the books of Jas Motors Service Centre Date Particulars Debit Credit…
Connors Company paid $700 cash to make a repair on equipment it sold under a oneyear warranty in the prior year. The entry to record the payment will debit
a. Accrued Warranty Payable and credit
Cash.
b. Operating Expense and credit Cash.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest ExpenseOn December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
- Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: The following transactions relating to payroll, payroll deductions, and payroll taxes Occurred during December: Dec. 2. Issued Check No. 410 for 3,400 to Jay Bank to invest in a retirement savings account for employees. 2. Issued Check No. 411 to Jay Bank for 27,046, in payment of 9,273 of social security tax, 2,318 of Medicare tax, and 15,455 of employees federal income tax due. 13. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Dec. 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 13. Journalized the entry to record payroll taxes on employees earnings of December13: social security tax, 4,632; Medicare tax, 1,158; state unemployment tax, 350; federal unemployment tax, 125. 16. Issued Check No. 424 to Jay Bank for 27,020, in payment of 9,264 of social security tax, 2,316 of Medicare tax, and 15,440 of employees federal income tax due. 19. Issued Check No. 429 to Sims-Walker Insurance Company for 31,500, in payment of the semiannual premium on the group medical insurance policy. 27. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: 27. Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 27. Journalized the entry to record payroll taxes on employees earnings of December27: social security tax, 4,668; Medicare tax, 1,167; state unemployment tax, 225; federal unemployment tax, 75. 27. Issued Check No. 543 for 20,884 to State Department of Revenue in payment of employees state income tax due on December 31. 31. Issued Check No. 545 to Jay Bank for 3,400 to invest in a retirement savings account for employees. 31. Paid 45,000 to the employee pension plan. The annual pension cost is 60,000. (Record both the payment and unfunded pension liability.) Instructions 1. Journalize the transactions. 2. Journalize the following adjusting entries on December 31: a. Salaries accrued: operations salaries, 8,560; officers salaries, 5,600; office salaries,1,400. The payroll taxes are immaterial and are not accrued. b. Vacation pay, 15,000.
- Accrued Interest On May 1, the Garnett Corporation wanted to purchase a $200,000 piece of equipment, but Garnett was only able to furnish $75,000 of its own cash to purchase the equipment. Garnett borrowed the remainder of the $200,000 from the Peoples National Bank on a 3-year, 4% note. Required: If the company keeps its records on a calendar year, what adjusting entry should Garnett make on December 31?Reporting Liabilities Morton Electronics had the following obligations: a. A legally enforceable claim against the business to be paid in 3 months. b. A guarantee given by a seller to a purchaser to repair or replace defective goods during the first 6 months following a sale. c. An amount payable to Bank One in 10 years. d. An amount to be paid next year to Citibank on a long-term note payable. Required: CONCEPTIJAL CONNECTION Describe how each of these items should be reported in the balance sheet.Reversing Entries Thomas Company entered into two transactions involving promissory notes and properly recorded each transaction. 1. On November 1, it purchased land at a cost of 8,000. It made a 2,000 down payment and signed a note payable agreeing to pay the 6,000 balance in 6 months plus interest at an annual rate of 10%. 2. On December 1, it accepted a 4,200, 3-month, 12% (annual interest rate) note receivable from a customer for the sale of merchandise. On December 31, Thomas made the following related adjustments: Required: 1. Assuming that Thomas uses reversing entries, prepare journal entries to record: a. the January 1, reversing entries b. the March 1, 4,326 collection of the note receivable c. the May 1, 6,300 payment of the note payable 2. Assuming instead that Thomas does not use reversing entries, prepare journal entries to record the collection of the note receivable and the payment of the note payable.
- Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A. A business sets up a line of credit with a supplier. The company purchases $10,000 worth of equipment on credit. Terms of purchase are 5/10, n/30. B. A customer purchases a watering hose for $25. The sales tax rate is 5%. C. Customers pay in advance for season tickets to a soccer game. There are fourteen customers, each paying $250 per season ticket. Each customer purchased two season tickets. D. A company issues 2,000 shares of its common stock with a price per share of $15.Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31.
