Adjusting Entries for Interest The following note transactions occurred during the first year for Towell Company: Nov 25 Towell issued a 60-day, nine percent note payable for $80,000 to Hyatt company for merchandise Dec 7 Towell signed a 120-day, $15,000 note at the bank at ten percent. 22 Towell gave Barr, Inc., a $12, 000, eight percent, 60-day note in payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
E10-4A
The following note transactions occurred during the first year for Towell Company:
Nov 25 Towell issued a 60-day, nine percent note payable for $80,000 to Hyatt company for merchandise
Dec 7 Towell signed a 120-day, $15,000 note at the bank at ten percent.
22 Towell gave Barr, Inc., a $12, 000, eight percent, 60-day note in payment of account.
Prepare the general
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
