Zing Cell Phone Company entered into the following transactions involving current liabilities during 2020 and 2021. 2020 Mar. 14 Purchased merchandise on credit from Ferris Inc. for $152,000. The terms were 1/10, n/30 (assume a perpetual inventory system). Apr. 14 Zing paid $31,000 cash and replaced the $121,000 remaining balance of the account payable to Ferris Inc. with a 4%, 60-day note payable. May 21 Borrowed $131,000 from Scotiabank by signing a 3.5%, 90-day note. ? Paid the note to Ferris Inc. at maturity. ? Paid the note to Scotiabank at maturity. Dec. 15 Borrowed $106,000 and signed a 4.25%, 120-day note with National Bank. Dec. 31 Recorded an adjusting entry for the accrual of interest on the note to National Bank. 2021 ? Paid the note to National Bank at maturity. Required: 1. Determine the maturity dates of the three notes just described. HINT: Maturity Date of Ferris Inc, Scotiabank, National bank respectively. Present journal entries for each of the preceding dates. (Use 365 days an year. Do not round intermediate calculations and round the final answers to 2 decimal places.) 2. Record the purchase of merchandise on credit 3. Record the payment of Cash and a note written to the extended due date.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Zing Cell Phone Company entered into the following transactions involving current liabilities during 2020 and 2021.

	2020
Mar.	14	Purchased merchandise on credit from Ferris Inc. for $152,000. The terms were 1/10, n/30 (assume a perpetual inventory system).
Apr.	14	Zing paid $31,000 cash and replaced the $121,000 remaining balance of the account payable to Ferris Inc. with a 4%, 60-day note payable.
May	21	Borrowed $131,000 from Scotiabank by signing a 3.5%, 90-day note.
	?	Paid the note to Ferris Inc. at maturity.
	?	Paid the note to Scotiabank at maturity.
Dec.	15	Borrowed $106,000 and signed a 4.25%, 120-day note with National Bank.
Dec.	31	Recorded an adjusting entry for the accrual of interest on the note to National Bank.
	2021
	?	Paid the note to National Bank at maturity.

Required:
1. Determine the maturity dates of the three notes just described.

HINT: Maturity Date of Ferris Inc, Scotiabank, National bank respectively.

Present journal entries for each of the preceding dates. (Use 365 days an year. Do not round intermediate calculations and round the final answers to 2 decimal places.)

2. Record the purchase of merchandise on credit

3. Record the payment of Cash and a note written to the extended due date.

Transaction
General Journal
Debit
Credit
a.

Transaction
General Journal
Debit
Credit
b.

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