Nova Corporation hired a new product manager and agreed to provide her a $31,000 relocation loan on a six-month, 6 percent note. a. The company loans the money on January 1. b. The new employee pays Nova the interest owed on the maturity date. c. The new employee pays Nova the full principal owed on the maturity date. Prepare journal entries to record the above transactions for Nova Corporation. (If no entry Is requlred for a transaction/event, select "No Journal Entry Requlred" In the first account fleld. Do not round Intermedlate calculations.) View transaction list Journal entry worksheet <> The company loans the money on January 1. Record the transaction. Note: Enter debits before credits. Date General Journal Debit Credit January 01 Clear entry View general journal Record entry

Nova Corporation hired a new product manager and agreed to provide her a $31,000 relocation loan on a six-month, 6 percent note. a. The company loans the money on January 1. b. The new employee pays Nova the interest owed on the maturity date. c. The new employee pays Nova the full principal owed on the maturity date. Prepare journal entries to record the above transactions for Nova Corporation. (If no entry Is requlred for a transaction/event, select "No Journal Entry Requlred" In the first account fleld. Do not round Intermedlate calculations.) View transaction list Journal entry worksheet <> The company loans the money on January 1. Record the transaction. Note: Enter debits before credits. Date General Journal Debit Credit January 01 Clear entry View general journal Record entry

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 11EB: Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from...

See similar textbooks

Similar questions

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.
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.
On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. During the period, the company completed $6,200 of the agreed-on services for the client. There was no beginning balance in the Unearned Revenue account for the period. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment
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.
McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. 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 9%. Each year on December 31, the company pays down the principal balance by $50,000. 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.
Ray, the owner of a small company, asked Holmes, CPA, to conduct an audit of the company’s records. Ray told Holmes that the audit must be completed in time to submit audited financial statements to a bank as part of a loan application. Holmes immediately accepted the engagement and agreed to provide an auditor’s report within three weeks. Ray agreed to pay Holmes a fixed fee plus a bonus if the loan was granted. Holmes hired two accounting students to conduct the audit and spent several hours telling them exactly what to do. Holmes told the students not to spend time reviewing the controls but to concentrate on proving the mathematical accuracy of the ledger accounts and to summarize the data in the accounting records that support Ray’s financial statements. The students followed Holmes’ instructions and after two weeks gave Holmes the financial statements, which did not include footnotes because the company did not have any unusual transactions. Holmes reviewed the statements and prepared an unqualified auditor’s report. The report, however, did not refer to GAAP or to the year-to-year application of such principles. Briefly describe each of the ten standards included in the PCAOB guidance and indicate how the action(s) of Holmes resulted in a failure to comply with each standard.
Review the following transactions and prepare any necessary journal entries for Woodworking Magazine. Woodworking Magazine provides one issue per month to subscribers for a service fee of $240 per year. Assume January 1 is the first day of operations for this company, and no new customers join during the year. A. On January 1, Woodworking Magazine receives advance cash payment from forty customers for magazine subscription services. Handyman had yet to provide subscription services as of January 1. B. On April 30, Woodworking recognizes subscription revenues earned. C. On October 31, Woodworking recognizes subscription revenues earned. D. On December 31, Woodworking recognizes subscription revenues earned.
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.
Mohammed LLC is a growing consulting firm. The following transactions take place during the current year. A. On June 10, Mohammed borrows $270,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in four months from June 10, and annual interest rate of 5%. B. On July 9, Mohammed borrows an additional $100,000 with payment due in four months from July 9, and an annual interest rate of 12%. C. Mohammed pays their accounts in full on October 10 for the June 10 loan, and on November 9 for the July 9 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Mohammed.