20 D8 E10-5 exerciseFAB Company sells a wide range of merchandise, which are initially purchased on account.Short-term notes are frequently issued to obtain cash.a) On January 10, FAB purchased $200 of merchandise on credit on a perpetual system.b) On March 1, FAB borrowed $600 by issuing a promissory note at face with 8 percentinterest accrued at the beginning of each month until paid at maturity in six months.c) On April 1, FAB accrued interest on the $600 note.NAMEd) On September 1, FAB paid the note and accrued interest.REQUIRED:1. On the spreadsheet below, record each event (a) to (d) above; name blank accounts.2. As each event is recorded, indicate its effect on FAB's current ratio, debt-asset ratio,and times interest earned: Increase, Decrease, or No effect. FAB had $3000 liabilitiesand $5000 total assets prior to January 10.Event--FAB Co.Beginning Balanca)buy merchandiseb) receive on notec) accrue interestfor March on Apr 1d) pay notepay interestEnding BALANCEa) buy mdse oncreditSCF Cash Inven-Classtory2500 2500Curnt Debt TimesRatioAsst Interstratio Earnd1000 10001000Comn Ret'd REStock Earn' Clas1000 1000 b) receive on notec) accrue Marchinterestd) pay notepay interest

The current ratio is computed by dividing the current asset by the current liabilities. A change in…

20 D8 E10-5 exercise FAB Company sells a wide range of merchandise, which are initially purchased on account. Short-term notes are frequently issued to obtain cash. a) On January 10, FAB purchased $200 of merchandise on credit on a perpetual system. b) On March 1, FAB borrowed $600 by issuing a promissory note at face with 8 percent interest accrued at the beginning of each month until paid at maturity in six months. c) On April 1, FAB accrued interest on the $600 note. d) On September 1, FAB paid the note and accrued interest. REQUIRED: 1. On the spreadsheet below, record each event (a) to (d) above; name blank accounts. NAME 2. As each event is recorded, indicate its effect on FAB's current ratio, debt-asset ratio, and times interest earned: Increase, Decrease, or No effect. FAB had $3000 liabilities and $5000 total assets prior to January 10. Event--FAB Co. Beginning Balanc a)buy merchandise b) receive on note c) accrue interest for March on Apr 1 d) pay note pay interest Ending BALANCE a) buy mdse on credit SCF Cash Inven- Class tory 2500 2500 ➖➖➖➖➖➖ Curnt Debt Times Ratio Asst Interst ratio Earnd 1000 1000 1000 Comn Ret'd RE Stock Earn' Clas 1000 1000 ➖➖➖➖➖

20 D8 E10-5 exercise FAB Company sells a wide range of merchandise, which are initially purchased on account. Short-term notes are frequently issued to obtain cash. a) On January 10, FAB purchased $200 of merchandise on credit on a perpetual system. b) On March 1, FAB borrowed $600 by issuing a promissory note at face with 8 percent interest accrued at the beginning of each month until paid at maturity in six months. c) On April 1, FAB accrued interest on the $600 note. d) On September 1, FAB paid the note and accrued interest. REQUIRED: 1. On the spreadsheet below, record each event (a) to (d) above; name blank accounts. NAME 2. As each event is recorded, indicate its effect on FAB's current ratio, debt-asset ratio, and times interest earned: Increase, Decrease, or No effect. FAB had $3000 liabilities and $5000 total assets prior to January 10. Event--FAB Co. Beginning Balanc a)buy merchandise b) receive on note c) accrue interest for March on Apr 1 d) pay note pay interest Ending BALANCE a) buy mdse on credit SCF Cash Inven- Class tory 2500 2500 ➖➖➖➖➖➖ Curnt Debt Times Ratio Asst Interst ratio Earnd 1000 1000 1000 Comn Ret'd RE Stock Earn' Clas 1000 1000 ➖➖➖➖➖

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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journalise the transaction
Bramble Corp. sold $132000 of goods and accepted the customer's $132000 9%, 1-year note receivable in exchange. Assuming 9% approximates the market rate of return, what would be the debit in this journal entry to record the sale? Debit Notes Receivable for $120120. No journal entry until cash is collected. Debit Notes Receivable for $132000. Debit Accounts Receivable for $132000.
4. AB company receives $10,000 for a 6 month, 8% note on 11/1/20. Prepare the journal entry for the receipt. Account Debit Credit 5. Prepare the journal entry to accrue interest on the above note at 12/31/20. Account Debit Credit 6. Prepare the entry to record payment of the above note in full on it's due date of 5/1/21. Account Debit Credit 7. AB Company purchases a truck in the amount of $15,000. Additional costs include sales tax of $1500, painting of $2500, license of $150 and a 1 year auto insurance policy of $1200. Complete the journal entry for the auto purchase. Account Debit Credit
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Current Attempt in Progress Carla Vista Distributors has the following transactions related to notes receivable during the last month of the year. Dec. 1 Loaned $11,520 cash to J. Cash on a 1-year, 5% note. 16 Sold goods to W. Jennings, receiving a $9,600, 60-day, 6% note. 31 Accrued interest revenue on all notes receivable. Journalize the transactions for Carla Vista Distributors. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Use 360 days for calculation. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit
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Question 13 On November 1, Fastly Co. sold goods and accepted a note of $72,000, six-month, with annual interest rate of 10% (real from the customer. The December 31 adjusting entry should be: Debit Interest Receivable 3,600; Credit Interest Revenue 3,600 Debit Interest Receivable 1,200; Credit Interest Revenue 1,200 O Debit Discount on Notes Receivable 1,200; Credit Interest Revenue 1,200 Debit Interest Revenue 3,600; Credit Interest Receivable 3,600
LO 8-3 E8-10 Recording Notes Receivable Transactions, Including Accrual Adjustment for Interest domic The following transactions took place for Smart Solutions Inc. 2020 a. July 1 b. Dec. 31 2021 c. July 1 250 06 Loaned $70,000 to employees of the company and received back one-year, 10 percent notes. shunt at las Accrued interest on the notes. d. July 1 berupa wollReceived interest on the notes. (No interest has been recorded since December 31.) ele St Received principal on the notes. noxidoa bed to Jouons tedW oli ni songly Bubanu adi 11 sqx mis bs& lo tuoms isrw Required: Prepare the journal entries that Smart Solutions Inc. would record for the above transactions.
Requirement 4. Record the payment of the note payable (principal and interest) on its maturity date. (Record debits first, then credits. Exclude explanations from journal entries.) ss attached thanks 4y1 4
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