PAS-3 Recording Notes Receivable Transactions Doubth C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Min- neapolis office. As part of the arrangement, CSM agreed on February 28, 2021, to advance Jeff $50,000 on a one-year, 8 percent note, with interest to be paid at maturity on February 28, 2022. CSM prepares financial statements on June 30 and December 31. 021.4 Required: 1. Prepare the journal entry CSM will make when the note is established. 2. 3. Prepare the journal entries CSM will make to accrue interest on June 30 and December 31. Prepare the journal entry CSM will make to record the interest and principal payments on 29517 bas zon February 28, 2022. LO 8-3 ainuod Bonewolla lo

PAS-3 Recording Notes Receivable Transactions Doubth C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Min- neapolis office. As part of the arrangement, CSM agreed on February 28, 2021, to advance Jeff $50,000 on a one-year, 8 percent note, with interest to be paid at maturity on February 28, 2022. CSM prepares financial statements on June 30 and December 31. 021.4 Required: 1. Prepare the journal entry CSM will make when the note is established. 2. 3. Prepare the journal entries CSM will make to accrue interest on June 30 and December 31. Prepare the journal entry CSM will make to record the interest and principal payments on 29517 bas zon February 28, 2022. LO 8-3 ainuod Bonewolla lo

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 75APSA: Note Payable and Accrued Interest Fairbome Company borrowed $60,000 on an 8%, interest-bearing note...

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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.
Notes Receivable Link Communications programs voicemail systems for businesses. For a recent project, they charged $135 000. The customer secured this amount by signing a note bearing 9% interest on February 1, 2019. Required: 1. Prepare the journal entry to record the sale on February 1, 2019. 2. Determine how much interest Link will receive if the note is repaid on December 1, 2019. 3. Prepare Links journal entry to record the cash received to pay off the note and interest on December 1, 2019.
Unearned Revenue Jennifers Landscaping Services signed a $400-per-month contract on November 1, 2019, to provide plant watering services for Lola Inc.s office buildings. Jennifers received 4 months' service fees in advance on signing the contract. Required: 1. Prepare Jennifers journal entry to record the cash receipt for the first 4 months. 2. Prepare Jennifers adjusting entry at December 31, 2019. 3. CONCEPTUAL CONNECTION How would the advance payment (account(s) and amounts(s)] be reported in Jennifers December 31, 2019, balance sheet? How would the advance payment [account(s) and amount(s)] be reported in Lolas December 31, 2019, balance sheet?
Notes Receivable Metzler Communications designs and programs a website for a local business. Metzler charges $46,000 for the project, and the local business signs an 8% note January 1, 2019. Required: 1. Prepare the journal entry to record the sale on January 1, 2019. 2. Determine how much interest Metzler will receive if the note is repaid on October 1, 2019. 3. Prepare Metzlers journal entry to record the cash received to pay off the note and interest on October 1, 2019.
Exercise 1-39 Current Assets and Current Liabilities Hanson Construction has an operating cycle of '5' months. On December 31. 2019, Hanson has the following assets and liabilities: A note receivable in the amount of $1500 10 be collected in 6 months Cash totaling $1,380 Accounts payable totaling $2,100, all of which will be paid within 2 months Accounts receivable totaling $12,000, including an account for $7,000 that will be paid in 2 months and an account for $5,000 that will be paid in 18 months Construction supplies coming $6,200, all of which will be used in construction within the next 12 months Construction equipment costing $60,000 on which depreciation of $22,400 has accumulated A note payable to the bank in the amount of $6,800 is to be paid within the next year Required: Calculate the amounts of current assets and current liabilities reported on Hansons balance sheet at December 31, 2019. CONCEPTUAL CONNECTION Comment on Hansons liquidity.
Notes Receivable On September 1, 2016, Dougherty Corp. accepted a six-month, 7%, $45,000 interest-bearing note from Rozelle Company in payment of an account receivable. Doughertys year-end is December 31. Rozelle paid the note and interest on the due date. Required Who is the maker and who is the payee of the note? What is the maturity date of the note? Prepare all necessary journal entries that Dougherty needs to make in connection with this note.
Interest Receivable On June 1, 2016, MicroTel Enterprises lends $60,000 to MaxiDriver Inc. The loan will be repaid in 60 days with interest at 10%. Required Prepare the journal entry on MicroTels books on June 1, 2016. Prepare the adjusting entry on MicroTels books on June 30, 2016. Prepare the entry on MicroTels books on July 31, 2016, when MaxiDriver repays the principal and interest.
Accounting for Notes Receivable Yarnell Electronics sells computer systems to small businesses. Yarnell engaged in the following activities involving notes receivable: a. On September 1, 2019, Yarnell sold a $10,000 system to Ross Company. Ross gave Yarnell a 6-month, 7% note as payment. b. On December 1, 2019, Yarnell sold a $6,000 system to Searfoss Inc. Searfoss gave Yarnell a 9-month, 9% note as payment. c. On March 1, 2020, Ross paid the amount due on its note. d. On September 1, 2020, Searfoss paid the amount due on its note. Required: Prepare the necessary journal and adjusting entries for Yarnell Electronics to record these transactions.
(Appendix 21.1) Comprehensive The following are Adair Companys December 31, 2018, post-closing trial balance and the December 31, 2019, adjusted trial balance: A review of the accounting records reveals the following additional information for 2019: Investments in bonds to be held to maturity were purchased at year-end for 8,600. A building was purchased for 28,000. A note payable was issued for 9,000. Common stock was issued for 14,500. Dividends of 6,500 were declared and paid. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support the 2019 statement of cash flows for Adair. 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
Spreadsheet from Trial Balance Heinz Companys post closing trial balance as of December 31, 2018, and the adjusted trial balance as of December 31, 2019, are shown here: A review of the accounting records reveals the following additional information: a. Bomb payable with a face value, book value, and market value of 14,000 were retired on June 30, 2019. b. Bonds payable with a face value of 8,000 were issued at 90.25 on August 1, 2019. They mature on August 1, 2024. The company uses the straight-line method to amortize the bond discount. c. The company sold a building that had an original cost of 8,000 and a book value of 4,800. The company received 2,200 in cash for the building and recorded a loss of 2,600. d. Equipment with a cost of 4,000 and a book value of 1,400 was exchanged for an acre of land valued at 2,700. No cash was exchanged. e. Long-term investments in bonds being held to maturity with a cost of 1,000 were sold for 800. f. Sixty-five shares of common stock were exchanged for a patent. The common stock was selling for 20 per share at the time of the exchange. Required: Prepare a spreadsheet to support a statement of cash flows for 2019.
Notes Payable Rogers Machinery Company borrowed $330,000 on February 1, with a 6-month, 10%, interest-bearing note. Required: 1. Record the borrowing transaction. 2. Record the repayment transaction.
(Appendix 3.1) Cash-Basis Accounting Puntarelli Contracting keep its accounting records on a cash basis during the year. At year end, it adjusts its books to the accrual basis for preparing its financial statements. At the end of 2018, Puntarelli reported the following balance sheet items. It is now the end of 2019. The companys checkbook shows a balance of 4,700, which includes cash receipts from customers of 51,300 and cash payments of 49,300. An examination of the cash payments shows that: (1) 30,600 was paid to suppliers, (2) 12,700 was paid for other operating costs (including 7,200 paid on January 1 for 2 years annual rent), and (3) 6,000 was withdrawn by T. Puntarelli. On December 51, 2019, (1) customers owed Puntarelli Contracting 55,900, (2) Puntarelli owed suppliers and employees 7,000 and 900, respectively, and (3) the ending inventory was 6,300. Puntarelli is depreciating the equipment using straight line depreciation over a 10-year life (no residual value). Required: 1. Using accrual based accounting, prepare a 2019 income statement (show supporting calculations). 2. Using accrual-based accounting, prepare a December 31, 2019, balance sheet (show supporting calculations).