Financial Accounting: Tools For Business Decisionmaking, Eighth Edition Wileyplus Blackboard Card
8th Edition
ISBN: 9781118953839
Author: Kimmel
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 8, Problem 8.11E
To determine
Accounts receivable:
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
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 lender or creditor. Notes receivable is an asset of a business.
To journalize: The transactions of Company B.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
These transactions took place for Swifty Corporation
2016
May 1
Received a $ 3,300, 12-month, 6% note in exchange for an outstanding account receivable from R. Stoney.
Dec. 31
Accrued interest revenue on the R. Stoney note.
2017
May 1
Received principal plus interest on the R. Stoney note. (No interest has been accrued since December 31, 2016.)
Record the transactions in the general journal. The company does not make entries to accrue interest except at December 31.(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
These transactions took place for Sheffield Corp.
2016
May 1
Received a $4,600, 12-month, 3% note in exchange for an outstanding account receivable from R. Stoney.
Dec. 31
Accrued interest revenue on the R. Stoney note.
2017
May 1
Received principal plus interest on the R. Stoney note. (No interest has been accrued since December 31, 2016.)
Record the transactions in the general journal. The company does not make entries to accrue interest except at December 31.(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
These transactions took place for Covington Corporation which has a December 31 fiscal year end. Covington does not maintain a separate Allowance for Doubtful Notes Receivable account.
2017
May 1
Received a $4,800, 1-year, 8% note in exchange for an outstanding account receivable from S. Dolan. Interest is due at the maturity of the note.
Nov. 1
Loaned $61,200 cash to B. Younger on a 4 month, 9% note. Interest is due at the end of each month.
Nov. 30
Received the interest due from B. Younger.
Dec. 31
Received the interest due from B. Younger.
Dec. 31
Accrued interest revenue on notes receivable.
2018
Jan. 31
Received the interest due from B. Younger. Younger also repaid 75% of the principal balance owing on the note at this time.
Feb. 28
Wrote off the balance of the B. Younger note as Younger has defaulted. Future payments are not expected. The interest due for the month of February was not collected.
May 1
Received principal plus interest…
Chapter 8 Solutions
Financial Accounting: Tools For Business Decisionmaking, Eighth Edition Wileyplus Blackboard Card
Ch. 8 - What is the difference between an account...Ch. 8 - What are some common types of receivables other...Ch. 8 - What are the essential features of the allowance...Ch. 8 - Prob. 4QCh. 8 - Prob. 5QCh. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - Tawnya Dobbs, the vice president of sales for...Ch. 8 - Prob. 9QCh. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - How may the maturity date of a promissory note be...Ch. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - General Motors Company has accounts receivable and...Ch. 8 - Prob. 17QCh. 8 - Prob. 18QCh. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - Prob. 21QCh. 8 - Prob. 22QCh. 8 - Prob. 23QCh. 8 - Prob. 24QCh. 8 - Presented below are three receivables...Ch. 8 - Prob. 8.2BECh. 8 - Prob. 8.3BECh. 8 - Prob. 8.4BECh. 8 - Byrd Co. uses the percentage-of-receivables basis...Ch. 8 - Prob. 8.6BECh. 8 - Compute interest and find the maturity date for...Ch. 8 - Prob. 8.8BECh. 8 - Prob. 8.9BECh. 8 - Prob. 8.10BECh. 8 - Prob. 8.11BECh. 8 - Prob. 8.12BECh. 8 - Prob. 8.1DIECh. 8 - Prob. 8.2ADIECh. 8 - Prob. 8.2BDIECh. 8 - Prob. 8.3DIECh. 8 - Prob. 8.4DIECh. 8 - Prob. 8.1ECh. 8 - Prob. 8.2ECh. 8 - Prob. 8.3ECh. 8 - Prob. 8.4ECh. 8 - Prob. 8.5ECh. 8 - Prob. 8.6ECh. 8 - Prob. 8.7ECh. 8 - Prob. 8.8ECh. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Prob. 8.17ECh. 8 - Prob. 8.1APCh. 8 - Prob. 8.2APCh. 8 - Prob. 8.3APCh. 8 - Prob. 8.4APCh. 8 - Prob. 8.5APCh. 8 - Prob. 8.6APCh. 8 - Prob. 8.7APCh. 8 - Prob. 8.8APCh. 8 - Prob. 8.9APCh. 8 - Prob. 8.1CACRCh. 8 - Prob. 8.1EYCTCh. 8 - Prob. 8.2EYCTCh. 8 - Prob. 8.3EYCTCh. 8 - Prob. 8.4EYCTCh. 8 - Prob. 8.7EYCTCh. 8 - Prob. 8.8EYCTCh. 8 - Prob. 8.9EYCTCh. 8 - Prob. 8.1IFRS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The following transactions have taken place for Accustart Corporation. The company has a December 31 fiscal year end and Accustart does not maintain a separate Allowance for Doubtful Notes Receivable account. 2024 May 1 Nov. 1 Nov. 30 Dec. 31 Dec. 31 2025 Jan. 31 Feb. 28 May 1 Received a $4,800, 1-year, 10% note in exchange for an outstanding account receivable from S. Dolan. Interest is due at the maturity of the note. Loaned $69,600 cash to B. Younger on a 4-month, 8% note. Interest is due at the end of each month. Received the interest due from B. Younger. Received the interest due from B. Younger. Accrued interest income on notes receivable. Received the interest due from B. Younger. Younger also repaid 70% of the principal Calance owing on the note at this time. Wrote off the balance of the B. Younger note as Younger has defaulted. Future payments are not expected. The interest due for the month of February was not collected. Received principal plus interest on the S. Dolan note.…arrow_forwardFollowing are selected transactions of Youth Inc. during December 2016. Dec 1: Youth accepted a one year 8% note receivable from a new customer, GGC. The note is in settlement of an existing $1,500 account receivable. The note plus interest is due on November 30, 2016. Dec 8: An account receivable from JJ in the amount of $700 is determined to be uncollectible and is written off against the Allowance for Doubtful Accounts. Dec 15: Received $200 from one of its clients. Originally this amount was written off as uncollectible since Youth never expected to receive this amount from its client. Additional information for adjusting entries is as follows: An aging of accounts receivable indicates very likely uncollectible accounts totaling $9,000. Prior to the month-end adjustment, the Allowance for Doubtful Accounts had a credit balance of $5,210. Accrued interest revenue on the note receivable from GGC dated December 1, 2016. Prepare the journal entries for December…arrow_forwardThe following selected transactions are from Ohlm Company. (Use 360 days a year.) 2016 Dec. 16 Accepted a $10,800, 60-day, 8% note dated this day in granting Danny Todd a time extension on his past-due account receivable. 31 Made an adjusting entry to record the accrued interest on the Todd note. 2017 Feb. 14 Received Todd’s payment of principal and interest on the note dated December 16. Mar. 2 Accepted a $6,100, 8%, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co. 17 Accepted a $2,400, 30-day, 7% note dated this day in granting Ava Privet a time extension on her past-due account receivable. Apr. 16 Privet dishonored her note when presented for payment. May 31 Midnight Co. refused to pay the note that was due to Ohlm Co. on May 31. Prepare the journal entry to charge the dishonored note plus accrued interest to Midnight Co.’s accounts receivable. July 16 Received…arrow_forward
- On December 1, 2017, Marin, Inc. assigns $ 3,380,000 of its accounts receivable to Sweet Acacia Bank as collateral for a $ 2,028,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 8%. Prepare the December 1 journal entries for both Marin and Sweet Acacia. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Marin, Inc. December 1 Sweet Acacia Bank December 1arrow_forwardThe following transactions took place for Smart Solutions Inc. 2017 a. July 1 Loaned $65,000 to an employee of the company and received back a one-year, 10 percent note. b. Dec. 31 Accrued interest on the note. 2018 c. July 1 Received interest on the note. (No interest has been recorded since December 31.) d. July 1 Received principal on the note. Required: Prepare the journal entries that Smart Solutions Inc. would record for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 Record the receipt of a note on July 1, 2017 for a $65,000 loan to an employee. Note: Enter debits before credits. Date General Journal Debit Credit Jul 01, 2017arrow_forward(Assigned Accounts Receivable—Journal Entries) Salen Company finances some of its current operations by assigning accounts receivable to a finance company. On July 1, 2017, it assigned, under guarantee, specific accounts amounting to $150,000. The finance company advanced to Salen 80% of the accounts assigned (20% of the total to be withheld until the finance company has made its full recovery), less a finance charge of ½% of the total accounts assigned.On July 31, Salen Company received a statement that the finance company had collected $80,000 of these accounts and had made an additional charge of ½% of the total accounts outstanding as of July 31. This charge is to be deducted at the time of the first remittance due Salen Company from the finance company. (Hint: Make entries at this time.) On August 31, 2017, Salen Company received a second statement from the finance company, together with a check for the amount due. The statement indicated that the finance company had collected an…arrow_forward
- K McKean Company has a three-month, $16,000, 6% note receivable from L. Stow that was signed on June 1, 2016. Stow defaults on the loan on September 1. Journalize the entry for McKean to record the default of the loan. (Record debits first, then, credits. Select the explanation on the last line of the journal entry table.) Date 2016 Sept. 1 Accounts Debit Credit HOarrow_forward(Basic Note and Accounts Receivable Transactions)Part 1: On July 1, 2017, Wallace Company, a calendar-year company, sold special-order merchandise on credit and received inreturn an interest-bearing note receivable from the customer. Wallace Company will receive interest at the prevailing rate for anote of this type. Both the principal and interest are due in one lump sum on June 30, 2018. InstructionsWhen should Wallace Company report interest revenue from the note receivable? Discuss the rationale for your answer Part 2: On December 31, 2017, Wallace Company had significant amounts of accounts receivable as a result of credit sales to its customers. Wallace uses the allowance method based on credit sales to estimate bad debts. Past experience indicates a reliable estimate of uncollectible accounts can be developed based on an aging analysis of receivable balances. This pattern is expected to continue. Instructions(a) Discuss the rationale for using the allowance method based on the…arrow_forwardMetlock Supply Co. has the following transactions related to notes receivable during the last 2 months of 2022. The company does not make entries to accrue interest except at December 31. Nov. 1 Dec. 11 (a) 16 31 Loaned $18,500 cash to Manny Lopez on a 12 month, 12% note. Sold goods to Ralph Kremer, Inc., receiving a $45,000, 90-day, 10% note. Received a $47,600, 180 day, 12% note to settle an open account from Joe Fernetti. Accrued interest revenue on all notes receivable. Journalize the transactions for Metlock Supply Co. (Ignore entries for cost of goods sold.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Use 360 days for calculation. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Nov. 1 Dec. 11 Dec. 16 Dec. 31 ETEXLUUUK and Media Account Titles and Explanation Debit Creditarrow_forward
- Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2022. The company does not make entries to accrue interest except at December 31. Nov. 1 Dec. 11 16 31 Loaned $30,000 cash to Manny Lopez on a 12 month, 10% note. Sold goods to Ralph Kremer, Inc., receiving a $6,750, 90-day, 8% note. Received a $4,000, 180 day, 9% note to settle an open account from Joe Fernetti. Accrued interest revenue on all notes receivable.arrow_forwardhe following transactions took place for Smart Solutions Inc. 2017 a. July 1 Loaned $75,000 to an employee of the company and received back a one-year, 8 percent note. b. Dec. 31 Accrued interest on the note. 2018 c. July 1 Received interest on the note. (No interest has been recorded since December 31.) d. July 1 Received principal on the note. Required: Prepare the journal entries that Smart Solutions Inc. would record for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)arrow_forwardAt December 31, 2016, Frost Company had outstanding P3,000,000, 12% note payable to Freeze Bank dated January 1, 2012. The note was due on December 31, 2017 which interest every December 31. During 2017, Frost notified Freeze Bank that it might be unable to meet the scheduled December 31, 2017 payment of principal and interest because of financial difficulties. On September 30, 2017, Freeze Bank sold the note for P2,800,000 to Frozen Company, one of Frost Company's oldest and largest customers, On December 31, 2017, Frozen Company agreed to accept inventory costing P2,600,000 worth P3,150,000 from Frost Company in full settlement of the note. The gain/loss reported in Frost Company's profit or loss as a result of the liability derecognition isarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License