Indicate whether each of the following assets and liabilities typically should be classified as current or long-term: (a) Accounts receivable within the next 60 days (b) Prepaid rent for the next six months (c) Notes receivable due in two years (d) Notes payable due in 90 days (e) Notes payable due in five years (f) Patent with a 12-year remaining legal life

Indicate whether each of the following assets and liabilities typically should be classified as current or long-term: (a) Accounts receivable within the next 60 days (b) Prepaid rent for the next six months (c) Notes receivable due in two years (d) Notes payable due in 90 days (e) Notes payable due in five years (f) Patent with a 12-year remaining legal life

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

Classification of Assets and Liabilities Indicate the appropriate classification of each of the following as a current asset (CA), noncurrent asset (NCA), current liability (CL), or long-term liability (LTL). ______ 1. Inventory ______ 2. Accounts payable ______ 3. Cash ______ 4. Patents ______ 5. Notes payable, due in six months ______ 6. Taxes payable ______ 7. Prepaid rent (for the next nine months) ______ 8. Bonds payable, due in ten years ______ 9. Machinery
If the Prepaid Insurance account had a balance of $12,000, representing one years policy premium, which was paid on July 1, what entry would be needed to adjust the Prepaid Insurance account at the end of December, before preparing the financial statements?
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.
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 Expense
Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three 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 February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.
JOURNAL ENTRIES (ACCRUED INTEREST RECEIVABLE) At the end of the year, the following interest is earned, but not yet received. Record the adjusting entry in a general journal. Interest on 6,000, 60-day, 5.5% note (for 24 days) 22.00 Interest on 9,000, 90-day, 6% note (for 12 days) 18.00 40.00
For each of the following accounts, identify in which section of the classified balance sheet it would be presented: current assets, property, intangibles, other assets, current liabilities, long-term liabilities, or stockholders equity. A. Building B. Cash C. Common Stock D. Copyright E. Prepaid Advertising F. Notes Payable (due six months later) G. Taxes Payable H. Unearned Rent Revenue
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.
JOURNAL ENTRIES (ACCRUED INTEREST PAYABLE) At the end of the year, the following interest is payable, but not yet paid. Record the adjusting entry in the general journal. Interest on 8,000, 90-day, 8% note (for 18 days) 32.00 Interest on 4,500, 60-day, 7% note (for 7 days) 6.13 38.13
Indicate whether each of the following assets and liabilities typically should be classified as current or long-term: (a) accounts receivable; (b) prepaid rent for the next six months; (c) notes receivable due in two years; (d) notespayable due in 90 days; (e) notes payable due in five years; and (f) patent.
Fifteen transactions or events affecting Drillmasters, Inc., are as follows Made a year-end adjusting entry to accrue interest on a note payable that has the interest rate stated separately from the principal amount. A liability classified for several years as a long-term becomes due within the next 12 months. Recorded the regular weekly payroll, including payroll taxes, amounts withheld from employees, and the issuance of paychecks. Made arrangements to extend a bank loan due in 30 days for another 24 months. Made a monthly payment on a fully amortized installment note payable. (Assume this note is classified as a current liability.) Called bonds payable due in five years at a price above the carrying value of the liability in the accounting records. Made a monthly payment on an operating lease. Made a monthly payment on a capital lease. (Assume only six months remain in the lease term.) Recorded pension expense on a fully funded pension plan. Recorded no pension post-retirement…
Fifteen transactions or events affecting Drillmasters, Inc., are as follows: Made a year-end adjusting entry to accrue interest on a note payable that has the interest rate stated separately from the principal amount. A liability classified for several years as a long-term becomes due within the next 12 months. Recorded the regular weekly payroll, including payroll taxes, amounts withheld from employees, and the issuance of paychecks. Made arrangements to extend a bank loan due in 30 days for another 24 months. Made a monthly payment on a fully amortized installment note payable. (Assume this note is classified as a current liability.) Called bonds payable due in five years at a price above the carrying value of the liability in the accounting records. Made a monthly payment on an operating lease. Made a monthly payment on a capital lease. (Assume only six months remain in the lease term.) Recorded pension expense on a fully funded pension plan. Recorded no pension post-retirement…