1. Costco Wholesale Corporation borrows $640,000 on September 1, 2021. Costco signs a nine-month, 6% promissory note. Interest is payable at maturity. Costco's year-end is December 31.1. Record the issuance of the note by Costco.2. Record the appropriate adjusting entry for the note by Costco on December 31, 2021.3. Record the payment of the note by Costco at maturity on May 31, 2022.DateAccount NameDebitCredit9/1[no1]12/31[no1][no1]5/31[no1][no1][no1][no1]

Formula: Interest amount = Notes payable amount x Time period x Interest rate.

Answered: 1. Costco Wholesale Corporation borrows…

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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Example 4 (Notes Receivable): On November 30, 2020, James Co. lent money to Scott Co. and issued a 5-month, $120,000, 8% note receivable. Scott paid James the full amount of interest and principal on April 30, 2021. What is the journal entry for James Co. to record the issuance of the note receivable? What is the end-of-year adjusting journal entry for James Co. to record interest revenue earned as of December 31?
26 )
Philip Company has a P200,000, 9%, 120-day note receivable outstanding on December 31. The note is dated November 1, 2021. What is the adjusting entry on December 31, 2021?
The following selected transactions relate to liabilities of United Insulation Corporation. United's fiscal year ends on December 31. 2024 January 13 Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $27.0 million at the bank's prime rate. February 1 Arranged a three-month bank loan of $6.6 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 13% was payable at maturity. May 1 Paid the 13% note at maturity. December 1 Supported by the credit line, issued $16.3 million of commercial paper on a nine - month note. Interest was discounted at Issuance at a 12% discount rate. December 31 Recorded any necessary adjusting entry(s). 2025 September 1 Paid the commercial paper at maturity. Required: Prepare the appropriate journal entries through the maturity of each liability.
PART - E Toner Limited (“Toner") borrows $180,000 on 1 July 2020 from Lighthouse Bank and signs a $180,000, 5%, 1-year promissory note. Assuming yearly accounting periods and a financial year end balance date of 31 December. Required: (i) Prepare the general journal entries to record the issuance of the promissory note. (ii) Prepare the general journal entries to record the adjusting journal entries as at 31 December 2020. (iii) Prepare the general journal entries to record the repayment on 1 July of 2021.
West County Bank agrees to lend Wildhorse Co. $472000 on January 1. Wildhorse Co. signs a $472000, 6%, 6-month note. What entry will Wildhorse Co. make to pay off the note and interest at maturity assuming that interest has been accrued to June 30? Notes Payable 486160 Cash 486160 Interest Payable 7080 Notes Payable 472000 Interest Expense 7080 Cash 486160 Notes Payable 472000 Interest Payable 14160 Cash 486160 Interest Expense 14160 Notes Payable 472000 Cash 486160
The following amortization schedule indicates the interest and principal that Chip's Cookie Corporation (CCC) must repay on an installment note established January 1, 2021. CCC has a December 31 year-end and makes the required annual payments on December 31. Year 1 2 3 4 Total Beginning Notes Payable 52,000 40,629 28, 235 14,725 Repaid Principal Interest Expense on Notes Payable (a) Annual Payment (b) Interest Expense (c) Notes Payable (d-1) Total Interest (d-2) Total Principal 4,680 3,657 2,541 1,325 12, 203 11,371 12,394 13,510 14,725 52,000 Ending Notes Payable 40,629 28,235 14,725 0 Use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of interest expense to report in the year ended December 31, 2021 (Year 1); (c) the note payable balance at January 1, 2024; and (d) the total interest and total principal paid over the note's entire life. (Round your answers to the nearest whole dollar amount.)
On January 1, 2021, Nantucket Ferry borrowed $14,600,000 cash from BankOne and issued a four-year, $14,600,000, 8% note. Interest was payable annually on December 31. Prepare the journal entries for both firms to record interest at December 31, 2021.
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At December 31, 2021, Sheridan Company had a five-month, 5%, $79,200 note receivable that was issued on October 1, 2021. Interest and principal are payable at maturity on March 1, 2022. Prepare the December 31, 2021, adjusting entry for accrued interest. Prepare the January 1, 2022, reversing entry.
Problem: ABC Company issued a promissory note to RCBC Bank. Details from the promissory note are as follows: Date of note: November 1, 2020 Term of note: 180 days Principal: P120,000 Interest rate: 12% Determine the following: 1. What is the account to be credited on the adjusting entry on December 31, 2020? 2. How much is the amount to be credited on December 31, 2020? 3. How much is the total interest expense for the full term of the note.
Martinez Co. borrowed $55,707 on March 1 of the current year by signing a 60-day, 12%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a:

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