Harrigan Enterprises utilizes Snoopy Systems to design and implement a cash management system. Due to Harrigan’s cash management problems, it cannot currently pay for the system out of pocket. Snoopy chooses to extend a 6% note on January 1, 2013, for the $27,000 project cost. Required: Hide 1. Prepare Snoopy's journal entry to record the service performed on January 1, 2013. Account and Explanation Debit Credit Record sale with note 2. Determine how much interest Snoopy will receive if the note is repaid on May 1, 2013.$ Hide 3. Provide Snoopy's journal entry to record the cash received to pay off the note and interest on May 1, 2013. If an amount box does not require an entry, leave it blank. Account and Explanation Debit Credit Record collection of note plus interest Check My Work

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets

Section: Chapter Questions

Problem 6AP

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Harrigan Enterprises utilizes Snoopy Systems to design and implement a cash management system. Due to Harrigan’s cash management problems, it cannot currently pay for the system out of pocket. Snoopy chooses to extend a 6% note on January 1, 2013, for the $27,000 project cost.

Required:

Hide

1. Prepare Snoopy's journal entry to record the service performed on January 1, 2013.

Account and Explanation

Debit

Credit

Record sale with note

2. Determine how much interest Snoopy will receive if the note is repaid on May 1, 2013.
$

Hide

3. Provide Snoopy's journal entry to record the cash received to pay off the note and interest on May 1, 2013. If an amount box does not require an entry, leave it blank.

Account and Explanation

Debit

Credit

Record collection of note plus interest

Check My Work

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