Financial Accounting: Business Process Approach, Student Value Edition Plus New Mylab Accounting With Pearson Etext -- Access Card Package (3rd Edition)
3rd Edition
ISBN: 9780132962667
Author: Jane L. Reimers
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 30EA
1.
To determine
Prepare
2.
To determine
Prepare accounting equation to record accrue interest for the month.
3.
To determine
Identify the balance in the interest payable account on September 30.
4.
To determine
Prepare accounting equation to record the transaction on November 30, when the loan amount is repaid with the interest (assume 3rd Transaction was completed).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Suppose that the company has a balance sheet as follows at the beginning of the year. In that single year, the following transactions occur. One of the customers pays his 1.400 TL amount of debt by check. The company immediately pays its 1.200 TL amount of debt by endorsing these checks. After a while, another customer pays 900 TL cash for an outstanding debt. The company deposits 800 TL of this amount to its bank. Then, the company decides to pay one half of its debts via EFT, and the other half of its debts by issuing its own checks. Lastly, the payee cashes these checks from the bank. Assuming that there are no more transactions throughout the year, what would be the total asset at the end of that year?
A) 1.000 TL
B) 1.400 TL
C) 1.800 TL
D) 2.000 TL
Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $41,600 face value note with annual interest based on an 11 percent discount. During Year 1, Parish provided services for $34,850 cash.
Required Answer the following questions. (Hint: Record the events in T-accounts prior to answering the questions.)
What is the amount of total liabilities on the December 31, Year 1, balance sheet?
What is the amount of net income on the Year 1 income statement?
What is the amount of cash flow from operating activities on the Year 1 statement of cash flows?
Provide the general journal entries necessary to record issuing the note on April 1, Year 1; recognizing accrued interest on December 31, Year 1; and repaying the loan on March 31, Year 2.
XYZ corp borrowed $3,500 from a bank on May 16. The loan was discounted at 10% and was to be repaid on july 25.
a) How much did the company receive from the bank?
b) How much did the bank earn on this transaction?
Chapter 7 Solutions
Financial Accounting: Business Process Approach, Student Value Edition Plus New Mylab Accounting With Pearson Etext -- Access Card Package (3rd Edition)
Ch. 7 - Prob. 1YTCh. 7 - Prob. 2YTCh. 7 - Prob. 3YTCh. 7 - If a 1,000 bond is selling for 95.5, how much cash...Ch. 7 - Prob. 5YTCh. 7 - Prob. 6YTCh. 7 - Prob. 7YTCh. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - What is a mortgage?
Ch. 7 - Prob. 4QCh. 7 - Prob. 5QCh. 7 - Prob. 6QCh. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10QCh. 7 - Prob. 11QCh. 7 - Prob. 12QCh. 7 - Prob. 13QCh. 7 - Prob. 1MCQCh. 7 - All of the following are current liabilities...Ch. 7 - Prob. 3MCQCh. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - Prob. 6MCQCh. 7 - Prob. 7MCQCh. 7 - Prob. 8MCQCh. 7 - A 1,000 bond with a stated rate of 8% is issued...Ch. 7 - Prob. 10MCQCh. 7 - Prob. 1SEACh. 7 - Prob. 2SEACh. 7 - Prob. 3SEACh. 7 - Prob. 4SEACh. 7 - Account for mortgages. (LO 3). Nunez Company has...Ch. 7 - Prob. 6SEACh. 7 - Account for bonds. (LO 4). If a 1,000 bound is...Ch. 7 - Prob. 8SEACh. 7 - Prob. 9SEACh. 7 - Prob. 10SEACh. 7 - Prob. 11SEACh. 7 - Prob. 12SEBCh. 7 - Prob. 13SEBCh. 7 - Prob. 14SEBCh. 7 - Prob. 15SEBCh. 7 - Account for mortgages. (LO 3). Curtain Company...Ch. 7 - Prob. 17SEBCh. 7 - Prob. 18SEBCh. 7 - Prob. 19SEBCh. 7 - Prob. 20SEBCh. 7 - Prob. 21SEBCh. 7 - Prob. 22SEBCh. 7 - Prob. 23EACh. 7 - Prob. 24EACh. 7 - Prob. 25EACh. 7 - Prob. 26EACh. 7 - Account for long-term liabilities. (LO 3, 5)....Ch. 7 - Prob. 28EACh. 7 - Prob. 29EACh. 7 - Prob. 30EACh. 7 - Prob. 31EACh. 7 - Prob. 32EACh. 7 - Prob. 33EACh. 7 - Prob. 34EACh. 7 - Prob. 35EACh. 7 - Prob. 36EACh. 7 - Prob. 37EACh. 7 - Prob. 38EACh. 7 - Prob. 39EACh. 7 - Prob. 40EACh. 7 - Prob. 41EACh. 7 - Prob. 42EBCh. 7 - Prob. 43EBCh. 7 - Prob. 44EBCh. 7 - Prob. 45EBCh. 7 - Prob. 46EBCh. 7 - Prob. 47EBCh. 7 - Prob. 48EBCh. 7 - Account for long-term liabilities. (LO 3, 5). On...Ch. 7 - Prob. 50EBCh. 7 - Prob. 51EBCh. 7 - Prob. 52EBCh. 7 - Prob. 53EBCh. 7 - Prob. 54EBCh. 7 - Prob. 55EBCh. 7 - Prob. 56EBCh. 7 - Prob. 57EBCh. 7 - Prob. 58EBCh. 7 - Prepare an amortization schedule for a bond issued...Ch. 7 - Prob. 60EBCh. 7 - Account for current liabilities. (LO 1, 5). On...Ch. 7 - Prob. 62PACh. 7 - Prob. 63PACh. 7 - Prob. 64PACh. 7 - Prob. 65PACh. 7 - Prob. 66PACh. 7 - Prob. 67PBCh. 7 - Prob. 68PBCh. 7 - Prob. 69PBCh. 7 - Prob. 70PBCh. 7 - Prob. 71PBCh. 7 - Prob. 72PBCh. 7 - Prob. 1FSACh. 7 - Prob. 2FSACh. 7 - Prob. 3FSACh. 7 - Prob. 1IECh. 7 - Prob. 2IECh. 7 - Do owners or creditors have more claims on the...Ch. 7 - Prob. 4IE
Knowledge Booster
Similar questions
- Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders equity, and prove the companys accounts will still be in balance. A. An investor invests an additional $25,000 into a company receiving stock in exchange. B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed. C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid. E. The electric bill in C is paid.arrow_forwardMcMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.arrow_forwardMohammed LLC is a growing consulting firm. The following transactions take place during the current year. A. On June 10, Mohammed borrows $270,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in four months from June 10, and annual interest rate of 5%. B. On July 9, Mohammed borrows an additional $100,000 with payment due in four months from July 9, and an annual interest rate of 12%. C. Mohammed pays their accounts in full on October 10 for the June 10 loan, and on November 9 for the July 9 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Mohammed.arrow_forward
- On May 1, Year 1, Benz’s Sandwich Shop loaned $14,000 to Mark Henry for one year at 8 percent interest. Requireda. What is Benz’s interest income for Year 1?b. What is Benz’s total amount of receivables at December 31, Year 1?c. How will the loan and interest be reported on Benz’s Year 1 statement of cash flows?d. What is Benz’s interest income for Year 2?e. What is the total amount of cash that Benz’s will collect in Year 2 from Mark Henry?f. How will the loan and interest be reported on Benz’s Year 2 statement of cash flows?g. What is the total amount of interest that Benz’s earned on the loan to Mark Henry?arrow_forwardPicasso Graphics is a graphics arts design consulting firm. Pablo Taylor, its treasurer and vice president of finance, has prepared a classified balance sheet as of July 31, 2016, the end of its fiscal year. This balance sheet will be submitted with Picasso Graphics' loan application to Paris Trust & Savings Bank. In the Current Assets section of the balance sheet, Pablo reported a $56,000 receivable from Becky Holt, the president of Picasso Graphics, as a trade account receivable. Becky borrowed the money from Picasso Graphics in January 2014 for a down payment on a new home. She has orally assured Pablo that she will pay off the account receivable within the next year. Pablo reported the $56,000 in the same manner on the preceding year's balance sheet. Evaluate whether it is acceptable for Pablo to prepare the July 31, 2016, balance sheet in this manner. Must be 150+ words, good grammar and source a similar real life experience or similar concepts discussed in financial…arrow_forwardPicasso Graphics is a graphics arts design consulting firm. Pablo Taylor, its treasurer and vice president of finance, has prepared a classified balance sheet as of July 31, 2016, the end of its fiscal year. This balance sheet will be submitted with Picasso Graphics’ loan application to Paris Trust & Savings Bank.In the Current Assets section of the balance sheet, Pablo reported a $56,000 receivable from Becky Holt, the president of Picasso Graphics, as a trade account receivable. Becky borrowed the money from Picasso Graphics in January 2014 for a down payment on a new home. She has orally assured Pablo that she will pay off the account receivable within the next year. Pablo reported the $56,000 in the same manner on the preceding year’s balance sheet.Evaluate whether it is acceptable for Pablo to prepare the July 31, 2016, balance sheet in this manner.arrow_forward
- Picasso Graphics is a graphics arts design consulting firm. Pablo Taylor, its treasurer and vice president of finance, has prepared a classified balance sheet as of July 31, 2016, the end of its fiscal year. This balance sheet will be submitted with Picasso Graphics' loan application to Paris Trust & Savings Bank. In the Current Assets section of the balance sheet, Pablo reported a $56,000 receivable from Becky Holt, the president of Picasso Graphics, as a trade account receivable. Becky borrowed the money from Picasso Graphics in January 2014 for a down payment on a new home. She has orally assured Pablo that she will pay off the account receivable within the next year. Pablo reported the $56,000 in the same manner on the preceding year's balance sheet. Evaluate whether it is acceptable for Pablo to prepare the July 31, 2016, balance sheet in this manner.arrow_forwardPicasso Graphics is a graphics arts design consulting firm. Pablo Taylor, its treasurer and vice president of finance, has prepared a classified balance sheet as of July 31, 2016, the end of its fiscal year. This balance sheet will be submitted with Picasso Graphics' loan application to Paris Trust & Savings Bank. In the Current Assets section of the balance sheet, Pablo reported a $56,000 receivable from Becky Holt, the president of Picasso Graphics, as a trade account receivable. Becky borrowed the money from Picasso Graphics in January 2014 for a down payment on a new home. She has orally assured Pablo that she will pay off the account receivable within the next year. Pablo reported the $56,000 in the same manner on the preceding year's balance sheet. Evaluate and share on thoughts on whether it is acceptable for Pablo to prepare the July 31, 2016, balance sheet in this mannerarrow_forwardKelly Jones and Tami Crawford borrowed $26,000 on a 7-month, 6% note from Gem State Bank to open their business, Pharoah’s Coffee House. The money was borrowed on June 1, 2022, and the note matures January 1, 2023. what is the entry to record the receipt of the funds from the loan? what is the entry to accrue the interest on June 30?arrow_forward
- The following transactions occurred during 2024 for the Beehive Honey Corporation: February 1 Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2025. April 1 Paid $3,600 to an insurance company for a two-year fire insurance policy. July 17 Purchased supplies costing $2,800 on account. At the year-end on December 31, 2024, supplies costing $1,250 remained on hand. November 1 A customer borrowed $6,000 and signed a note requiring the customer to pay principal and 8% interest on April 30, 2025. Required: Record each transaction in general journal form. Prepare any necessary adjusting entries at the year-end on December 31, 2024. No adjusting entries were recorded during the year for any item.arrow_forward19 Dec. Borrowed $28,000 from the bank for personal use. The loan carried an interest rate of 6% a year and the first payment was due on 19 January. Williamson signed a note payable to the bank in the name of the business. How would this be journaled, put on an income statment, balance sheet, and cash flow statment for december 31st?arrow_forwardEach business day, on average, a company writes checks totaling $30,000 to pay its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $50,000. The cash from the payments is available to the firm after two days. a) Calculate the company’s disbursement float and net float. b) How would your answer to part (a) change if the collected funds were available in one day instead of two?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning