Adjusting Entries for Interest At December 31, 2011, Hoffman Corporation had two notes payable outstanding (notes 1 and 2). At December 31, 2012, Hoffman also had two notes payable outstanding (notes 3 and 4). These notes are described below: Date of note Principal Amount Interest Rate Number of Days December 31, 2011 Note 1 Novemer 16, 2011 $14,000 8% 120 Note 2 December 04, 2011 18,000 9% 60 December 31, 2012 Note 3 December 07, 2012 11,000 9% 60 Note 4 December 21, 2012 20,000 10% 30 Required a. Prepare the adjusting entries for interest at December 31, 2011. b. Assume that the adjusting entries were made at December 31, 2011. Prepare the 2012 journal entries to record payment of the notes that were outstanding at December 31, 2011. c. Prepare the adjusting entries for interest at December 31, 2012. Round answers to nearest dollar. Use 360 days for interest calculations when applicable.
Adjusting Entries for Interest At December 31, 2011, Hoffman Corporation had two notes payable outstanding (notes 1 and 2). At December 31, 2012, Hoffman also had two notes payable outstanding (notes 3 and 4). These notes are described below: Date of note Principal Amount Interest Rate Number of Days December 31, 2011 Note 1 Novemer 16, 2011 $14,000 8% 120 Note 2 December 04, 2011 18,000 9% 60 December 31, 2012 Note 3 December 07, 2012 11,000 9% 60 Note 4 December 21, 2012 20,000 10% 30 Required a. Prepare the adjusting entries for interest at December 31, 2011. b. Assume that the adjusting entries were made at December 31, 2011. Prepare the 2012 journal entries to record payment of the notes that were outstanding at December 31, 2011. c. Prepare the adjusting entries for interest at December 31, 2012. Round answers to nearest dollar. Use 360 days for interest calculations when applicable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
At December 31, 2011, Hoffman Corporation had two notes payable outstanding (notes 1 and 2). At December 31, 2012, Hoffman also had two notes payable outstanding (notes 3 and 4). These notes are described below:
| Date of note | Principal Amount | Interest Rate | Number of Days | |
|---|---|---|---|---|
| December 31, 2011 | ||||
| Note 1 | Novemer 16, 2011 | $14,000 | 8% | 120 |
| Note 2 | December 04, 2011 | 18,000 | 9% | 60 |
| December 31, 2012 | ||||
| Note 3 | December 07, 2012 | 11,000 | 9% | 60 |
| Note 4 | December 21, 2012 | 20,000 | 10% | 30 |
Required
a. Prepare the adjusting entries for interest at December 31, 2011.
b. Assume that the adjusting entries were made at December 31, 2011. Prepare the 2012
c. Prepare the adjusting entries for interest at December 31, 2012.
Round answers to nearest dollar. Use 360 days for interest calculations when applicable.
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