Riviera Interior Design had the following transactions for the year ended 30 June 2020: Thisbusiness is registered for GST1 July 2019Created a provision for warranties for $7,600.None had previously existed.1 April2020Agreed to accept a 90-day (due date fixed) billof exchange from CBD Wholesalers in relationto an overdue account payable of $8,700,together with interest at 5% per year.30 May2020Riviera Interior Design pays the bill payable toZed Manufacturers.14 June2020A successful claim was made by a customer fora fault in an antique table they had previouslypurchased. The antique table was underwarranty. The cost to rectify the fault was$627 including GST which was paid in cash.The payroll and payroll deductions for June2020 were as follows:Gross wages$63,12030 June2020PAYG tax$18,936Superannuation contributionsMedical insurance$4,080Required:Prepare general journal entries to record the above transactions. Narrations are not required.$5,996

When an event occurs in the business and it can be measured and expressed in terms of money, it…

Riviera Interior Design had the following transactions for the year ended 30 June 2020: This business is registered for GST 1 July 2019 Created a provision for warranties for $7,600. None had previously existed. 1 April 2020 Agreed to accept a 90-day (due date fixed) bill of exchange from CBD Wholesalers in relation to an overdue account payable of $8,700, together with interest at 5% per year. 30 May Riviera Interior Design pays the bill payable to Zed Manufacturers. 2020

Riviera Interior Design had the following transactions for the year ended 30 June 2020: This business is registered for GST 1 July 2019 Created a provision for warranties for $7,600. None had previously existed. 1 April 2020 Agreed to accept a 90-day (due date fixed) bill of exchange from CBD Wholesalers in relation to an overdue account payable of $8,700, together with interest at 5% per year. 30 May Riviera Interior Design pays the bill payable to Zed Manufacturers. 2020

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...

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On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
Anderson Air is a customer of Handler Cleaning Operations. For Anderson Airs latest purchase on January 1, 2018, Handler Cleaning Operations issues a note with a principal amount of $1,255,000, 6% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Handler Cleaning Operations for the following transactions. A. Entry for note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019
On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 2020.
On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000
Assurance-Type Warranty Clean-All Inc. sells washing machines with a 3-year assurance-type warranty. In the past, Clean-All has found that in the year after sale, warranty costs have been 3% of sales; in the second year after sale, 5% of sales; and in the third year after sale, 7% of sales. The following data are also available: Required: 1. Prepare the journal entries for the preceding transactions for 20192021. Closing entries are not required. 2. What amount would Clean-All report as a liability on its December 31, 2021, balance sheet, assuming the liability had a balance of 88,200 on December 31, 2018? 3. Next Level How would the failure to recognize a contingent liability affect the financial statements?
Arvan Patel is a customer of Banks Hardware Store. For Mr. Patels latest purchase on January 1, 2018, Banks Hardware issues a note with a principal amount of $480,000, 13% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Banks Hardware Store for the following transactions. A. Note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019.
Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise. The merchandise had a cost to Resin Milling of $170,000. The terms of the note are 24-month maturity date on December 31, 2019 at a 5% annual interest rate. The customer does not pay on its account and dishonors the note. Record the journal entries for Resin Milling for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on January 1, 2020, assuming interest has not been recognized before note maturity
Non-Interest-Bearing Notes Payable On November 16, 2019, Clear Glass Company borrowed 20,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items Would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Companys effective interest rate?
Notes Payable and Effective Interest On November 1,2019, Edwin Inc. borrowed cash and signed a 60,000, 1-year note payable. Required: Compute the following items assuming (a) an interest-bearing note at 12%, (b) a non-interest-bearing note discounted at 12%: cash received effective interest rate interest expense for 2019 Prepare the journal entries for Edwin under each case for 2019 and 2020. Next Level Why is the effective rate higher for the non-interest-bearing note?