Fundamental Accounting Principles
24th Edition
ISBN: 9781260158595
Author: Wild
Publisher: MCG
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Chapter 11, Problem 1BPSB
Problem 11-1B Short-term notes payable transactions and entries P1 Warner Co. entered into the following transactions invohing short-term liabilities. Yearl Apr, 22 Purchased $5,000 of merchandise on credit from Fox-Pro, terms n/30.
May 23 Replaced the April 22 account payable (o Fox-Pro with a 60-day, 15% S4,6O0 note payable along with paying $400 in cash. July 15 Borrowed SI2,000 cash from Spring Bank by signing a 120-day, J0%, $12,000 note payable, ? Paid the amount due on the note to Fox-Pro at maturity. ? Paid the amount due on the note to Spring Bank at maturity, Dec. 6 Borrowed $8,000 cash From City Bank by signing a 45-day, °%, $8,000 note payable, 31 Recorded an
Year 2 ? Paid the amount due on the note to City Bank at maturity. Required
1. Determine the mafrtrity date for each of the three notes described.
2. Determine the interest due at maturity' for each of the three notes. Assume a 360-day year. Check (2: Fox-Pro. $115
3. Determine the interest expense recorded in the adjusting entry at the end ofYear 1.
[3} £50
4. Detenriine the interest expense recorded in Year 2. [4) HO
5. Prepare
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Exerclse 9-4 Interest-bearlng notes payable with year-end adjustments LO P1
Keesha Co. borrows $235,000 cash on November 1 of the current year by signing a 90-day, 11%. $235,000 note.
1. On what date does this note mature?
2. & 3. What is the amount of interest expense in the current year and the following year from this note?
4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at
maturity.
X Answer is not complete.
Complete this question by entering your answers in the tabs below.
Req 1
Reg 2 and 3
Req 4
Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the
note at maturity. (Use 360 days a year. Do not round internmediate calculations.)
No
Transaction
General Journal
Debit
Credit
(a)
Cash
235,000 O
Notes payable
235,000 O
(b)
Interest expense
4,308 O
Interest payable
4,308 O
3
(c)
Interest payable
2,154 X
Interest expense
4,308 X
Notes…
Saved
Exercise 9-4 Interest-bearlng notes payable with year-end adjustments LO P1
Keesha Co. borrows $235,000 cash on November 1 of the current year by signing a 90-day, 11%, $235,000 note.
1. On what date does this note mature?
2. & 3. What is the amount of interest expense in the current year and the following year from this note?
4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at
maturity.
Complete this question by entering your answers in the tabs below.
Reg 1
Reg 2 and 3
Req 4
What is the amount of interest expense in the current year and the following year from this note? (Use 360 days a year.
Round final answers to the nearest whole dollar.)
es
Interest
Total
through
maturity
Interest
Expense
Current Year
Expense
Following
Year
Principal
Rate (%)
Time
Total interest
Question 31
Nelsie Corporation has an outstanding 60- day 6% note receivable armounting to P 15.000 dated December 1 of the current
yoar. The company is using the calendar yoar in preparing its financial statomonts. What account should be creditod and
what is the amount?
Interest Income, P 75
Interest Income, P 900
Oc
Accrued Interest Income, P 150
Unearmed Interest Income, P150
Chapter 11 Solutions
Fundamental Accounting Principles
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - Prob. 3DQCh. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - Prob. 9DQCh. 11 - Prob. 10DQ
Ch. 11 - Prob. 11DQCh. 11 - Prob. 12DQCh. 11 - Prob. 13DQCh. 11 - Prob. 14DQCh. 11 - Prob. 15DQCh. 11 - Refer to Samsung’s recent balance sheet in...Ch. 11 - Prob. 1QSCh. 11 - Prob. 2QSCh. 11 - QS 11-3
Unearned revenue
C2
Ticketsales, Inc.,...Ch. 11 - Interest-bearing note transactions P1 On November...Ch. 11 - Recording employee payroll taxes P2 On January 15,...Ch. 11 - Prob. 6QSCh. 11 - Accounting for bonuses P4 Noura Company offers an...Ch. 11 - Prob. 8QSCh. 11 - Prob. 9QSCh. 11 - Prob. 10QSCh. 11 - Prob. 11QSCh. 11 - Prob. 12QSCh. 11 - Prob. 13QSCh. 11 - Prob. 14QSCh. 11 - Prob. 15QSCh. 11 - Exercise 11-1
Classifying liabilities
C1
The...Ch. 11 - Prob. 2ECh. 11 - Exercise 11-3 Accounting for note payable...Ch. 11 - Exercise 11-4 Interest-bearing notes payable with...Ch. 11 - Exercise 11-5 Computing payroll taxes P2 P3
BMX...Ch. 11 - Exercise 11-6 Payroll-related journal entries...Ch. 11 - Exercise 11-7 Payroll-related journal entries...Ch. 11 - Prob. 8ECh. 11 - Exercise 11-9 Computing payroll taxes P2 P3 Mest...Ch. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Exercise 11-15 Preparing a balance sheet C1 P2...Ch. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Problem 11-1A Short-term notes payable...Ch. 11 - Problem 11-2A Entries for payroll transactions P2...Ch. 11 - Problem 11-3A Payroll expenses, withholdings, and...Ch. 11 - Prob. 4APSACh. 11 - Prob. 5APSACh. 11 - Prob. 6APSACh. 11 - Problem 11-1B Short-term notes payable...Ch. 11 - Problem 11-2B Entries for payroll transactions P2...Ch. 11 - Problem 11-3B Payroll expenses, withholdings, and...Ch. 11 - Prob. 4BPSBCh. 11 - Prob. 5BPSBCh. 11 - Prob. 6BPSBCh. 11 - Review the February 26 and March 25 transactions...Ch. 11 - Bug-Off Exterminators provides pest control...Ch. 11 - Prob. 1GLPCh. 11 - Prob. 1AACh. 11 - Key figures for Apple and Google follow. Apple...Ch. 11 - Prob. 3AACh. 11 - BTN 11-3 Cameron Bly is a sales manager for an...Ch. 11 - Prob. 2BTNCh. 11 - Prob. 3BTNCh. 11 - Prob. 4BTNCh. 11 - Prob. 5BTNCh. 11 - Prob. 6BTN
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- Entries for discounted note payable A business issued a 60-day note for 75,000 to a creditor on account. The note was discounted at 7%. Journalize the entries to record (A) the issuance of the note and (B) the payment of the note at maturity.arrow_forwardProceeds from notes payable On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 45-day note with a face amount of 150,000. A. Determine the proceeds of the note, assuming the note carries an interest rate of 10%. B. Determine the proceeds of the note, assuming the note is discounted at 10%.arrow_forwardLiability transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Mar. 1. Purchased merchandise on account from Kirkwood Co., 175,000, terms n/30. 31. Issued a 30-day, 6% note for 175,000 to Kirkwood Co., on account. Apr. 30. Paid Kirkwood Co. the amount owed on the note of March 31. June 1. Borrowed 400,000 from Triple Creek Bank, issuing a 45-day, 5% note. July 1. Purchased tools by issuing a 45,000,60-day note to Poulin Co., which discounted the note at the rate of 7%. 16. Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6% note for 400,000. (Journalize both the debit and credit to the notes payable account.) Aug. 15. Paid Triple Creek Bank the amount due on the note of July 16. 30. Paid Poulin Co. the amount due on the note of July 1. Dec. 1. Purchased equipment from Greenwood Co. for 260,000, paying 40,000 cash and issuing a series of ten 9% notes for 22,000 each, coming due at 30-day intervals. 22. Settled a product liability lawsuit with a customer for 50,000, payable in January. Accrued the loss in a litigation claims payable account. 31. Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. Instructions 1. Journalize the transactions. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: A. Product warranty cost, 80,000. B. Interest on the nine remaining notes owed to Greenwood Co.arrow_forward
- Entries for notes receivable Valley Designs Issued a 120-day, 5% note for 60,000 dated April 15 to Bork Furniture Company on account. A. Determine the due date of the note. B. Determine the maturity value of the note. C. Journalize the entries to record the following: CD receipt of the note by Bork Furniture and (2) receipt of payment of the note at maturity.arrow_forwardEntries for bad debt expense under the direct write-off and allowance methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel 21,550 Lee Drake 33,925 Jenny Green 27,565 Mike Lamb 19,460 Total 102,500 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0-30 days 715,000 1% 31-60 days 310,000 2 61 -90 days 102,000 15 91-120 days 76,000 30 More than 120 days 97,000 60 Total receivables 1,300,000 A. Journalize the write-offs under the direct write-off method. B. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of 95,000 and the company uses the analysis of receivables method. C. How much higher (lower) would Seaforth International s net income have been under the allowance method than under the direct write-off method?arrow_forwardJOURNAL ENTRIES (NOTE ISSUED FOR BANK LOAN) Prepare general journal entries for the following transactions: July15 Borrowed 5,000 cash from the bank, giving a 60-day non- interest-bearing note. The note is discounted 8% by the bank. Sept.13 Paid the 5,000 note, recognizing the discount as interest expense.arrow_forward
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