Barkers Baked Goods purchases dog treats from a supplieron February 2 at a quantity of 8,000 treats at $1 per treat.Terms of the purchase are 2/10, n/30. Barkers pays halfthe amount due in cash on February 28 but cannot pay theremaining balance due in four days. The supplierrenegotiates the terms on March 4 and allows Barkers toconvert its purchase payment into a short-term note, withan annual interest rate of 6 percent, payable in 9 months.A. Compute the interest expense due when Barkers honorsthe note.B. Show the entry to record the payment of the short-termnote on December 4. If an amount box does not require anentry, leave it blank.Dec. 4Accounts PayableAccounts ReceivableCashInterest ExpenseShort-Term Notes Payable

Total Purchases = Quantity×rate = 8,000×$1 = $8,000 Payment History: $4,000($8,0002)= February Remaining = $ 4,000 = After february Interest Due: =Remaing amount to be paid through note×interest rate×time periodTotal time period$ 4,000×0.06×9months12months=$180

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Barkers Baked Goods purchases dog treats from a supplie on February 2 at a quantity of 8,000 treats at $1 per trea Terms of the purchase are 2/10, n/30. Barkers pays half the amount due in cash on February 28 but cannot pay th remaining balance due in four days. The supplier renegotiates the terms on March 4 and allows Barkers to convert its purchase payment into a short-term note, wit

Barkers Baked Goods purchases dog treats from a supplie on February 2 at a quantity of 8,000 treats at $1 per trea Terms of the purchase are 2/10, n/30. Barkers pays half the amount due in cash on February 28 but cannot pay th remaining balance due in four days. The supplier renegotiates the terms on March 4 and allows Barkers to convert its purchase payment into a short-term note, wit

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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