Cosimo Enterprises issues a $260,000, 45-day, 5% note to Dixon Industries for merchandise inventory.a. Journalize Cosimo Enterprises’ entries to record:1. the issuance of the note.2. the payment of the note at maturity.b. Journalize Dixon Industries’ entries to record:1. the receipt of the note.2. the receipt of the payment of the note at maturity.

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Asked Dec 17, 2019
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Cosimo Enterprises issues a $260,000, 45-day, 5% note to Dixon Industries for merchandise inventory.
a. Journalize Cosimo Enterprises’ entries to record:
1. the issuance of the note.
2. the payment of the note at maturity.
b. Journalize Dixon Industries’ entries to record:
1. the receipt of the note.
2. the receipt of the payment of the note at maturity.

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Expert Answer

Step 1

Requirement a 1:

Journalize the entry to record the issuance of the note:

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Post Debit Credit Date Account Title and Explanation Ref. | ($) |($) Merchandise Inventory 260,000 Note Payable 260,000 (To record the issuance of notes for merchandise inventory)

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Step 2

Requirement a 2:

Journalize the entry to record the payment of note at maturity.

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Post Debit Credit Date Account Title and Explanation Ref. ($) ($) Note Payable 260,000 Interest Expense (1) 1,625 Cash 261,625 |(To record payment of Note Payable with interest)

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Step 3

Requirement b 1:

Journalize the receipts of n...

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Post Debit Credit Date Account Title and Explanation Ref. ($) ($) Notes Receivable 260,000 Sales 260,000 (To record the receipts of the note)

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