Homework Help is Here – Start Your Trial Now!
Business
Accounting
a. Journalize the above four events on the books of Hampton Construction. b. Indicate the effects of each of the four transactions journalized in part a on the elements of the financial statement shown. Use the code letters I for increase, D for decrease, and NE for no effect.

a. Journalize the above four events on the books of Hampton Construction. b. Indicate the effects of each of the four transactions journalized in part a on the elements of the financial statement shown. Use the code letters I for increase, D for decrease, and NE for no effect.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Do not give solution in image 

On August 1, year 1, Hampton Construction received a 4.5 percent, 6-month note receivable from Dusty Roads, one of Hampton Construction's problem credit customers. Roads had owed $35,500 on an outstanding account receivable. The note receivable was taken in settlement of this amount. Assume that Hampton Construction makes adjusting entries for accrued interest revenue once each year on December 31. 1. Record the receipt of the note on August 1 in settlement of the account receivable. 2. Record accrued interest at December 31, year 1. 3. Assume that Dusty Roads pays the note plus accrued interest in full. Record the collection of the principal and interest on January 31, year 2. 4. Assume that Dusty Roads did not make the necessary principal and interest payment on January 31, year 2. Rather, assume that he defaulted on his obligation. Record the default on January 31, year 2. Required: a. Journalize the above four events on the books of Hampton Construction. b. Indicate the effects of each of the four transactions journalized in part a on the elements of the financial statement shown. Use the code letters I for increase, D for decrease, and NE for no effect. Complete this question by entering your answers in the tabs below. Required A Required B Journalize the above four events on the books of Hampton Construction. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations and round your final answers to the nearest dollar amount.
Transcribed Image Text:On August 1, year 1, Hampton Construction received a 4.5 percent, 6-month note receivable from Dusty Roads, one of Hampton Construction's problem credit customers. Roads had owed $35,500 on an outstanding account receivable. The note receivable was taken in settlement of this amount. Assume that Hampton Construction makes adjusting entries for accrued interest revenue once each year on December 31. 1. Record the receipt of the note on August 1 in settlement of the account receivable. 2. Record accrued interest at December 31, year 1. 3. Assume that Dusty Roads pays the note plus accrued interest in full. Record the collection of the principal and interest on January 31, year 2. 4. Assume that Dusty Roads did not make the necessary principal and interest payment on January 31, year 2. Rather, assume that he defaulted on his obligation. Record the default on January 31, year 2. Required: a. Journalize the above four events on the books of Hampton Construction. b. Indicate the effects of each of the four transactions journalized in part a on the elements of the financial statement shown. Use the code letters I for increase, D for decrease, and NE for no effect. Complete this question by entering your answers in the tabs below. Required A Required B Journalize the above four events on the books of Hampton Construction. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations and round your final answers to the nearest dollar amount.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Information
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.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS