What is the correcting entry for this? A machine worth 150, 000 was purchased on September 1, 2015 with an issuance of notes payable that has an interest rate of 5%. The notes payable was correctly booked but the equipment was erroneously recorded under Other Operating Expenses.

What is the correcting entry for this? A machine worth 150, 000 was purchased on September 1, 2015 with an issuance of notes payable that has an interest rate of 5%. The notes payable was correctly booked but the equipment was erroneously recorded under Other Operating Expenses.

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 40BE: Accrued Interest On May 1, the Garnett Corporation wanted to purchase a $200,000 piece of equipment,...

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Teal, Inc. owns equipment that cost $134,000 and has a useful life of 10 years with no salvage value. On January 1, 2017, Teal leases the equipment to Morgan Corporation for one year with one rental payment of $13,800 on January 1. Prepare Teal’s 2017 journal entries. Date Account Titles and Explanation Debit Credit January 1 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (To record receipt of lease payment) December 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (To record the recognition of the revenue each period) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (To record depreciation expenses on the leased asset)
On December 31, Trinkets Supply Company noted the following transactions that occurred during 2015, some or all of which might require adjustment to the books. (a)Payment of $4,300 to suppliers was made for purchases on account during the year and was not recorded.(b)Building and land were purchased on January 2 for $190,000 . The building’s fair value was $141,000 at the time of purchase. The building is being depreciated over a 30-year life using the straight-line method, assuming no salvage value.(c)Of the $52,000 in Accounts Receivable, 5% is estimated to be uncollectible. Currently, Allowance for Bad Debts shows a debit balance of $200 .(d)On September 1, $80,000 was loaned to a customer on a 12-month note with interest at an annual rate of 11% .(e)During 2015, Trinkets Supply received $15,200 in advance for services, 80% of which will be performed in 2016. The $15,200 was credited to Sales Revenue.(f)The interest expense account was debited for all interest charges incurred…
On December 31, Trinkets Supply Company noted the following transactions that occurredduring 2015, some or all of which might require adjustments to the books.(a)Payment of $4,300 to suppliers was made for purchases on account during the year andwas not recorded.(b)Building and land were purchased on Jan. 2 for $190,000. The building’s fair value was$141,000 at the time of purchase. The building is being depreciated over a 30-year lifeusing the straight-line method assuming no salvage value.(c)Of the $52,000 in Accounts Receivable, 5% is estimated to be uncollectible. Currently,Allowance for Bad Debtsshows a debit balance of $200.(d)On Sept 1, $80,000 was loaned to a customer on a 12-month note with interest at anannual rate of 11%.(e)During 2015, Trinkets Supply received $15,200 in advance for services, 80% of which willbe performed in 2016. The $15,200 was credited to Sales Revenue.(f)The interest expense account was debited for all interest charges incurred during the yearand shows…
Bridgeport Corp.’s unadjusted trial balance at December 1, 2017, is presented below. Debit Credit Cash $26,900 Accounts Receivable 35,500 Notes Receivable 9,500 Interest Receivable 0 Inventory 36,170 Prepaid Insurance 3,900 Land 21,500 Buildings 163,800 Equipment 60,000 Patent 9,810 Allowance for Doubtful Accounts $600 Accumulated Depreciation—Buildings 54,600 Accumulated Depreciation—Equipment 24,000 Accounts Payable 27,200 Salaries and Wages Payable 0 Notes Payable (due April 30, 2018) 11,900 Income Taxes Payable 0 Interest Payable 0 Notes Payable (due in 2023) 35,900 Common Stock 51,600 Retained Earnings 69,080 Dividends 13,500 Sales Revenue 911,500 Interest Revenue 0 Gain on Disposal of Plant Assets 0 Bad Debt Expense 0 Cost of Goods Sold 635,000 Depreciation Expense 0 Income Tax Expense 0…
Pina Colada Corp.’s unadjusted trial balance at December 1, 2017, is presented below. Debit Credit Cash $25,900 Accounts Receivable 35,100 Notes Receivable 8,400 Interest Receivable 0 Inventory 36,280 Prepaid Insurance 3,600 Land 21,800 Buildings 140,100 Equipment 60,500 Patent 9,630 Allowance for Doubtful Accounts $600 Accumulated Depreciation—Buildings 46,700 Accumulated Depreciation—Equipment 24,200 Accounts Payable 28,100 Salaries and Wages Payable 0 Notes Payable (due April 30, 2018) 12,900 Income Taxes Payable 0 Interest Payable 0 Notes Payable (due in 2023) 36,000 Common Stock 56,400 Retained Earnings 24,410 Dividends 13,500 Sales Revenue 923,500 Interest Revenue 0 Gain on Disposal of Plant Assets 0 Bad Debt Expense 0 Cost of Goods Sold 631,500 Depreciation Expense 0 Income Tax Expense 0…
On December 12, 2016, an investment costing $80,000 was sold for $100,000. The total of the sale proceeds was credited to the investment account. Required: 1. Prepare the journal entry to correct the error assuming it is discovered before the books are adjusted or closed in 2016. (Ignore income taxes.) 2. Prepare the journal entry to correct the error assuming it is not discovered until early 2017. (Ignore income taxes.)
On March 1, the Applewood Corporation wanted to purchase a $475,000 piece of equipment, but Applewood was only able to furnish $161,500 of its own cash to purchase the equipment. Applewood borrowed the remainder of the $475,000 from the People’s National Bank on a 2-year, 5.5% note. Required: If the company keeps its records on a calendar year, what adjusting entry should Applewood make on December 31? If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. Dec. 31 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 (Record accrued interest expense)
The following is a list of account titles and amounts (in millions) reported at December 27, 2015, by Hasbro, Inc., a leading manufacturer of games, toys, and interactive entertainment software for children and families: Accounts Receivable $ 1,235 Equipment $ 415 Accumulated Amortization 840 Goodwill 595 Accumulated Depreciation 360 Inventories 380 Allowance for Doubtful Accounts 15 Land 5 Buildings 180 Licensing Rights 1,860 Cash and Cash Equivalents 980 Prepaid Rent 290 Required: Prepare the asset section of a classified balance sheet for Hasbro, Inc. Using Hasbro’s 2015 Net Sales Revenue of $4,450 (million), its Net Fixed Assets of $240 (million) at December 28, 2014, and its Net Fixed Assets computed at December 27, 2015, calculate the fixed asset turnover ratio for 2015.
The following accounts were taken from the trial balance of Cole Company as of December 31, 2015: Given the information below, make the necessary adjusting entries. The equipment has an estimated useful life of 10 years and a salvage value of $4,000. Depreciation is calculated using the straight-line method. Of selling expense, $1,500 has been paid in advance. Interest of $800 has accrued on notes receivable. Of advertising expense, $440 was incorrectly debited to Selling Expense.
The firm of Adam and Son extracted a Trial Balance from the books on 30th June 2020 and found that the credit side exceeded the debit by sh.92,000. This difference was entered into a suspense account and the final account prepared. The following mistakes were subsequently discovered: 1. machinery repairs of sh.40,000 had been entered on the debit side of the machinery account. 2. Cash discount of sh.2000 allowed by Milele Ltd., a payable had not been entered in Milele Ltd Account. 3. The purchase of a computer for sh.320,000 had been entered in the office equipment account as sh.230,000. 4. The Sales Book had been under cast by sh.10,000. 5. Loan interest charged by the bank, sh.60,000, had been entered in the Bank account but not posted to the interest on loan account. 6. Sh.25,000 received for the sale of an old office desk had been debited in the cash book and also debited to the office equipment account. Required: a) Draw the journal entries…
Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for major repairs Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jadas balance sheet resulting from this years transactions? What amount did Jada report on the income statement for expenses for the year?
Accrued Interest On May 1, the Garnett Corporation wanted to purchase a $200,000 piece of equipment, but Garnett was only able to furnish $75,000 of its own cash to purchase the equipment. Garnett borrowed the remainder of the $200,000 from the Peoples National Bank on a 3-year, 4% note. Required: If the company keeps its records on a calendar year, what adjusting entry should Garnett make on December 31?