At the beginning of the month, a company purchased new office equipment for $80,000, paying $30,000 in cash and agreeing to pay the remaining balance over 6 months through an interest-free financing option provided by the vendor. The entry to record the purchase of the office equipment is made at month-end. What would the effect of this transaction on the company's current month-end accounting equation?

At the beginning of the month, a company purchased new office equipment for $80,000, paying $30,000 in cash and agreeing to pay the remaining balance over 6 months through an interest-free financing option provided by the vendor. The entry to record the purchase of the office equipment is made at month-end. What would the effect of this transaction on the company's current month-end accounting equation?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 3RE: Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that...

See similar textbooks

Similar questions

Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that it will owe 17,400 in property taxes for the year. On June 1, its property taxes are assessed at 17,000, which it pays immediately. Prepare the related journal entries for April 1, May 1, and June 1. Then compute the monthly property tax expense that Cee Co. would record during June through March.
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
On September 1, Kennedy Company loaned $126,000, at 11% annual interest, to a customer. Interest and principal will be collected when the loan matures one year from the issue date. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end? Multiple Choice Debit Cash, $4,620; credit Interest Revenue, $4,620. Debit Interest Expense, $4,620; credit Interest Payable, $4,620 Debit Interest Receivable, 4,620; credit Interest Revenue, $4620. Debit Interest Expense, $13,860; credit Interest Payable, $13,860 Debit Interest Receivable, $13,860; credit Cash, $13,860 Graw 7:26 PM W 100% 3 Type here to search 2/21/2022
On June 7,2019, Dilby Mechanical Corp completed $50,00 of servicing work for a client and billed them for that amount plus a GST of $2,500 and PST of $3,50; terms are N20. Required: a. Prepare the journal entry as it would appear in Dilby's accounting records. b. Assume the receivable established on June 7 was collected on June 27. Record the entry.
How much interest expense is incurred of this financial accounting question?
What are the journal entry, t-account, and balance sheet of the following;
On October 1, Eder Fabrication borrowed $60 million and issued a nine-month, 12% promissory note. Interest was payable at maturity. Prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the note at December 31, the end of the reporting period. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: During January 2021, the following transactions occur:January 1 Purchase equipment for $19,500. The company estimates a residual value of $1,500 and a five-year service life. January 4 Pay cash on accounts payable, $9,500. January 8 Purchase additional inventory on account, $82,900. January 15 Receive cash on accounts receivable, $22,000 January 19 Pay cash for salaries, $29,800. January 28 Pay cash for January utilities, $16,500. January 30 Firework sales for January total $220,000. All of these sales are on account. The cost of the units sold is $115,000. Required: 1. Record each of the transactions listed above. 2. Record adjusting entries on January 31. a. Depreciation on the equipment for the month of January is calculated using the straightline method. b. At the end of January, $3,000 of accounts receivable are past due, and the company estimates that 50% of these accounts will…
On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. Interest and principal will be collected when the loan matures one year from the issue date. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end?
On December 1, Milton Company borrowed $390,000, at 7% annual Interest, from the Tennessee National Bank. Interest is paid when the loan matures one year from the issue date. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? Multiple Choice debit Interest Payeble, $2.275; credit Interest Expense, $2,275. debit Interest Expense, $4,550; credit interest Payable, $4,550. debit Interest Expense, $27,300; credit Interest Paynble, $27,300. debit Interest Expense, $2,275; crecit Cash, $2,275. debit Interest Expense, $2,275; credit Interest Payable, $2,275. < Prev 12 of 30 SEN MacBook Air O O O 00
Danali Corporation borrowed $270,000 on October 1. The note carried a 11 percent interest rate with the principal and interest payable on May 1 of next year. Prepare the following journal entries. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Prepare the journal entry to record the note on October 1. 2 Note: Enter debits before credits. Date October 01 Record entry General Journal Clear entry Prev Debit Credit View general journal 2 of 7 Next > Check my work
On September 1, 20X1, Chabon Corp. purchased machinery costing $20,000 by issuing a 12-month, 12%, promissory note to the seller. The note's principal plus interest will be paid when the note matures on September 1, 20X2. Interest calculations are rounded to the nearest whole month. Required: Record the September 1, 20X1 transaction, the year-end adjustment for interest, and the loan repayment on September 1, 20X2.