1. On January 1, 2023, Malone purchased a building with a $200,000 10 year zero interest note. The normal borrowing rate for Malone is 10%. (you will need to use TVM and an amortization table) A. Compute the present value and prepare an amortization table. B. Record the necessary journal entries at 1/1/23, 12/31/23 and 12/31/24 using the effective interest method. C. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23 and 12/31/24. 2. On October 1, 2023, Malone borrowed $50,000 by issuing a 11 month, 9% note. Interest will be paid at maturity. (you do NOT need to use TVM or an amortization table) A. Record the journal entries at 10/1/23, 12/31/23 and maturity. B. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23 and 12/31/24. 3. During 2023 Jones sells products that carry a three-year manufacturer’s warranty. Jones sold 2,000 units this year for $2,000 each. For this year’s sales, Jones estimates the warranty costs to be 8% of sales. Jones incurred $45,000 servicing the warranty. A. Record all the necessary journal entries in 2023 B. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23. 4. Customers have the opportunity at the time of purchase to also buy a 4 year extended warranty for an additional charge of $100. During 2023, Jones sold 200 extended warranties. In 2023, Jones incurred costs of $2,000 to service extended warranties. A. Record all the necessary journal entries in 2023 B. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23. 5. James purchased $8,000 of merchandise from Barett terms 1/10, n/30 on May 3rd. On May 10th James returned $600 or merchandise to Barett. Record the necessary journal entry for James on May 12th when they paid Barrett assuming James uses the periodic, gross method. 6. During the month of June, Bench Co. had cash sales of $300,000 and credit sales of $180,000, both of which include the 8% sales tax that must be remitted to the state by July 15. Record the necessary journal entry in June. 7. Ellison Company sold 40 $100 gift cards during 2024. During the year, 10 of the gift cards were redeemed. Ellison Estimates that 4 of the gift cards will never be redeemed. Prepare the 3 journal entries for 2024.
1. On January 1, 2023, Malone purchased a building with a $200,000 10 year zero interest note. The normal borrowing rate for Malone is 10%. (you will need to use TVM and an amortization table)
A. Compute the present value and prepare an amortization table.
B. Record the necessary journal entries at 1/1/23, 12/31/23 and 12/31/24 using the effective interest method. C. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23 and 12/31/24.
2. On October 1, 2023, Malone borrowed $50,000 by issuing a 11 month, 9% note. Interest will be paid at maturity. (you do NOT need to use TVM or an amortization table)
A. Record the journal entries at 10/1/23, 12/31/23 and maturity.
B. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23 and 12/31/24.
3. During 2023 Jones sells products that carry a three-year manufacturer’s warranty. Jones sold 2,000 units this year for $2,000 each. For this year’s sales, Jones estimates the warranty costs to be 8% of sales. Jones incurred $45,000 servicing the warranty.
A. Record all the necessary journal entries in 2023
B. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23.
4. Customers have the opportunity at the time of purchase to also buy a 4 year extended warranty for an additional charge of $100. During 2023, Jones sold 200 extended warranties. In 2023, Jones incurred costs of $2,000 to service extended warranties.
A. Record all the necessary journal entries in 2023
B. Show the financial statement presentation of the note on the I/S and B/S at 12/31/23.
5. James purchased $8,000 of merchandise from Barett terms 1/10, n/30 on May 3rd. On May 10th James returned $600 or merchandise to Barett. Record the necessary
6. During the month of June, Bench Co. had cash sales of $300,000 and credit sales of $180,000, both of which include the 8% sales tax that must be remitted to the state by July 15. Record the necessary journal entry in June.
7. Ellison Company sold 40 $100 gift cards during 2024. During the year, 10 of the gift cards were redeemed. Ellison Estimates that 4 of the gift cards will never be redeemed. Prepare the 3 journal entries for 2024.
Step by step
Solved in 6 steps with 2 images
