College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 17, Problem 11SPA

NOTES RECEIVABLE DISCOUNTING Marienau Suppliers had the following transactions:

Chapter 17, Problem 11SPA, NOTES RECEIVABLE DISCOUNTING Marienau Suppliers had the following transactions: REQUIRED Record the

REQUIRED

Record the transactions in a general journal.

Expert Solution & Answer
Check Mark
To determine

Prepare a journal entry to record Suppliers M.

Explanation of Solution

Note receivable:

Note receivable refers to a written promise for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or, borrower to the lender or creditor. Notes receivable is an asset of a business.

DateAccount titles and ExplanationDebitCredit
March 1Accounts receivable -G.P$5,000
     Sales$5,000
(To record sale made on account)
March 20Notes receivable$5,000
     Accounts receivable - G.P$5,000
(To record received note to settle  account)
March 30Cash (1)$4,984.78
Interest expense (2)$15.22
     Notes receivable$5,000
(To record discount on notes receivable)
April 20Notes receivable$3,000
     Sales$3,000
(To record received note for merchandise sale)
May 5Cash (3)$3,003.49
     Notes receivable$3,000
      Interest revenue (4)$3.49
(To record received payment of note with interest)
June 19Accounts receivable - D. L$3,070
     Cash$3,070
(To record cash paid for dishonoured note)
July 31Cash$3,091.49
     Accounts receivable - D. L$3,070
      Interest revenue (5)$21.49
(To record Collected dishonoured note with interest)
August 1Accounts receivable - A.B$5,600
     Sales$5,600
(To record sale made on account)
August 12Cash$400
Notes receivable$5,200
     Accounts receivable - A.B$5,600
(To record cash received and note to settle account)
September 11Cash (6)$421.67
Notes receivable (new note)$4,800
     Notes receivable (old note)$5,200
      Interest revenue (7)$21.67
(To record received new note plus interest on old note)
September 26Cash$4,802.55
     Notes receivable$4,800
      Interest revenue $2.55
(To record received payment of note with interest)
November 10Accounts receivable - A.B$4,888
     Cash$4,888
(To record cash paid for dishonoured note)
December 15Cash$4,916.51
     Accounts receivable - A.B$4,888
     Interest revenue (8)$28.51
(To record Collected dishonoured note with interest)

Table (1)

Working notes:

(1) Calculate cash proceeds.

Cash proceeds =Maturity value Discount amount (Difference in time period)=($5,000+($5,000×6%×90360))($5,075×8%×80360)=$5,075$90.22=$4,984.78

(2) Calculate interest expense.

Interest expense =Notes payableCash proceeds= $5,000$4,984.78=$15.22

(3) Calculate cash proceeds.

Cash proceeds =Maturity value Discount amount (Difference in time period)=($3,000+($3,000×6%×60360))($3,030×7%×45360)=$3,030$26.51=$3,003.49

(4) Calculate interest revenue.

Interest revenue =Cash proceedsNotes receivable= $3,003.49$3,000=$3.49

(5) Calculate interest revenue.

Interest revenue=Notes receivable ×Interest rate×Time period=$3,070×6%×42360=$21.49

(6) Calculate interest revenue.

Interest revenue=Notes receivable ×Interest rate×Time period=$5,200×5%×30360=$21.67

(6) Calculate cash proceeds.

Cash proceeds =Maturity value Discount amount (Difference in time period)=($4,800+($4,800×6%×60360))($4,848×7.5%×45360)=$4,848$45.45=$4,802.55

(7) Calculate interest revenue.

Interest revenue =Cash proceedsNotes receivable= $4,802.55$4,800=$2.55

(8) Calculate interest revenue.

Interest revenue=Notes receivable ×Interest rate×Time period=$4,888×6%×35360=$28.51

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Fiona sporty uses to purchases journal a cash payment journal ,a sale journal and a general journal indicate which journal the following transactions are most likely to be recorded  Purchased inventories on credit  Sales of inventory on credit  Received payment of customer accounts Payment of monthly rent by cheque  End of period closing enteries
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Chapter 17 Solutions

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Ch. 17 - Prob. 1CECh. 17 - Prob. 2CECh. 17 - Prob. 3CECh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - On which notes receivable and notes payable is it...Ch. 17 - Prob. 11RQCh. 17 - When a business borrows money from a bank on a...Ch. 17 - What kind of account is Discount on Notes Payable,...Ch. 17 - Prob. 14RQCh. 17 - Prob. 15RQCh. 17 - TERM OF A NOTE Calculate total time in days for...Ch. 17 - Prob. 2SEACh. 17 - DETERMINING DUE DATE Determine the due date for...Ch. 17 - JOURNAL ENTRIES (NOTE RECEIVED, RENEWED, AND...Ch. 17 - Prob. 5SEACh. 17 - JOURNAL ENTRIES (ACCRUED INTEREST RECEIVABLE) At...Ch. 17 - JOURNAL ENTRIES (NOTE ISSUED, RENEWED, AND PAID)...Ch. 17 - JOURNAL ENTRIES (NOTE ISSUED FOR BANK LOAN)...Ch. 17 - JOURNAL ENTRIES (ACCRUED INTEREST PAYABLE) At the...Ch. 17 - NOTES RECEIVABLE ENTRIES J. K. Pratt Co. had the...Ch. 17 - NOTES RECEIVABLE DISCOUNTING Marienau Suppliers...Ch. 17 - ACCRUED INTEREST RECEIVABLE The following is a...Ch. 17 - NOTES PAYABLE ENTRIES Milo Radio Shop had the...Ch. 17 - ACCRUED INTEREST PAYABLE The following is a list...Ch. 17 - TERM OF A NOTE Calculate total time in days for...Ch. 17 - CALCULATING INTEREST Using 360 days as the...Ch. 17 - DETERMINING DUE DATE Determine the due date for...Ch. 17 - JOURNAL ENTRIES (NOTE RECEIVED, RENEWED, AND...Ch. 17 - JOURNAL ENTRIES (NOTE RECEIVED, DISCOUNTED,...Ch. 17 - JOURNAL ENTRIES (ACCRUED INTEREST RECEIVABLE) At...Ch. 17 - JOURNAL ENTRIES (NOTE ISSUED, RENEWED, AND PAID)...Ch. 17 - JOURNAL ENTRIES (NOTE ISSUED FOR BANK LOAN)...Ch. 17 - JOURNAL ENTRIES (ACCRUED INTEREST PAYABLE) At the...Ch. 17 - NOTES RECEIVABLE ENTRIES M. L. DiMaurizio had the...Ch. 17 - NOTES RECEIVABLE DISCOUNTING Madison Graphics had...Ch. 17 - ACCRUED INTEREST RECEIVABLE The following is a...Ch. 17 - Prob. 13SPBCh. 17 - ACCRUED INTEREST PAYABLE The following is a list...Ch. 17 - Prob. 1MYWCh. 17 - Rochelle needed to borrow 3,000 for three months...Ch. 17 - Eddie Edwards and Phil Bell own and operate The...Ch. 17 - Prob. 1CP
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