Ex. 193Prepare journal entries to record the following transactions entered into by Valente Company:2020Received a $10,000, 12%, 1-year note from Andrea Foley as full payment on heraccount.June 1Nov. 1Sold merchandise on account to Patton, Inc. for $12,000, terms 2/10, n/30.Nov.5 Patton, Inc. returned merchandise worth $500.9 Received payment in full from Patton, Inc.Dec. 31Accrued interest on Foley's note.2021June 1Andrea Foley honored her promissory note by sending the face amount plus interest.No interest has been accrued in 2021.

Journal- It is the initial step within the process of recording the transactions which shows dual…

Answered: Ex. 193 Prepare journal entries to…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 92PSA

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Note Payable and Accrued Interest Fairbome Company borrowed $60,000 on an 8%, interest-bearing note on October 1, 2019. Fairborne ends its fiscal year on December 31. The note was paid with interest on May 1, 2020. Required: 1. Prepare the entry for this note on October 1, 2019. 2. Prepare the adjusting entry for this note on December 31, 2019. 3. Indicate how the note and the accrued interest would appear in the balance sheet at December 31, 2019. 4. Prepare the entry to record the repayment of the note on May 1, 2020.
Note Payable and Accrued Interest Ellsworth Enterprises borrowed $425,000 on an 8%, interest-bearing note on September 30, 2020. Ellsworth ends its fiscal year on December 31. The note was paid with interest on March 31, 2021. Required: 1. Prepare the entry for this note on September 30, 2020. 2. Prepare the adjusting entry for this note on December 31, 2020. 3. Indicate how the note and the accrued interest would appear on the balance sheet at December 31, 2020. 4. Prepare the entry to record the repayment of the note on March 31, 2021.
Notes Receivable On January 1, 2019, Lisa Company sold machinery with a book value of 118,000 to Mark Company. Mark signed a 180,000 non-interest-bearing note, payable in three 60,000 annual installments on December 31, 2019, 2020, and 2021. The fair value of the machinery was 149,211.12 on the date of sale. The machinery had been purchased by Lisa at a cost of 160,000. Required: 1. Prepare all the journal entries on Lisas books for January 1, 2019, through December 31, 2021. 2. Prepare the notes receivable portion of Lisas balance sheet on December 31, 2019 and 2020.
Use information from EA10. Compute the interest expense due when Barkers honors the note. Show the journal entry to recognize payment of the short-term note on December 4.

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