Answered: Bill's Barber shop signed a one-year 7%…

Bill's Barber shop signed a one-year 7% bak loan payable in the amount of 5,000 on April 1, 2022.Interest is due at maturity

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On December, 2021 the company borrows $20,000 from Mega Bank Ltd. at 6% per annum to buy a delivery…

A: In accounting adjusting entry refers to that journal entry that are recorded at the end of the…

Q: adjusting entry at the end of the year 2019

A: Interest accrued = Value of note * Rate of interest = $10000 * 6% = $600

Q: n December 1, 2024, Liang Chemical provides services to a customer for $88,000. In payment for the…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: On November 1, 2019, Norwood borrows $410,000 cash from a bank by signing a five-year installment…

A: Journal is the book of original entry in which all the transactions of the business are recorded…

Q: McKlien Corporation has a six-month, $10,000, 6% note receivable from L. Noel that was signed on…

A: The company sells goods either on a cash or credit basis. If goods or services are sold on credit it…

Q: On November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $20,700. What…

A: Adjusting entries are a collection of journal entries produced at the end of an accounting period to…

Q: On October 12, 2020, Golf Co. received from one of its customers, Ping Co., a $30,500, 8% 90 day…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: On January 1, 2021, Umbrella Insurance Company has collected $24,000 for multiple two-year insurance…

A: Insurance premium for a month = Total premium collected / Period of insurance = $24,000 / 24 months…

Q: On December 1, 2020, Shaw Company accepted from Bogner a $10,000, 3-month, 8% note in lieu of an…

A: Journal entries are used by the management to record the transactions in the books of accounts.…

Q: On 31 May, 2020, the business borrowed $30,000 on a four year, 5% per annum loan that calls for…

A: Adjusting entries are prepared by management to ensure the accrual basis accounting system. It is…

Q: Wildhorse Co. issued a five-year interest-bearing note payable for $324000 on January 1, 2019. Each…

A: Balance sheet is the financial statement which involves the total debt, liabilities, assets and…

Q: Mango Co. issued a 6%, interest-bearing note payable on October 1, 2023. The note matures on April…

A: The objective of the question is to determine the adjusting entry for the interest-bearing note…

Q: at the end of each month with the first installment due on Ja ired: d the issuance of the note…

A: Answer : Date Journal Debit Credit January 1,2024 Cash a/c Dr. $32,000 To notes payable…

Q: On October 1, 2021, Oberley Corporation loans one of its employees $24,000 and accepts a 12-month,…

A: Using accrual basis accounting, the revenue is earned and recorded in the period it is actually…

Q: On November 1, 2019, Norwood borrows $200,000 cash from a bank by signing a five-year installment…

A: Amortization schedule of loan: It can be defined as a table that shows the expense of interest,…

Q: Prepare journal entry for Windsor, Inc. to record the receipt of the proceeds of the note. Prepare…

A: Solution:- Given, Windsor, Inc. borrows $67,200 from Wildhorse Co. Signing a 4%, one-year note…

Q: On January 1 of this year, Diorite borrows $100,000 with a 5%, 9-month loan. Interest is due at…

A: Journal entries means the book of prime entry incuding debit and credit item. Adjusting entry means…

Q: On November 1, 2019, Norwood borrows $410,000 cash from a bank by signing a five-year installment…

A: Journal entry is a primary entry that records the financial transactions initially.

Q: Monty Company borrowed $52,800 on November 1, 2025, by signing a $52,800, 9%, 3-month note. Prepare…

A: Notes payable is the obligation for an entity. It represents the amount of money to be paid by an…

Q: Blue Inc. has a year-end of June 30. On December 1, 2020, the company signed a 10-month, 5% note…

A: Interest income for 7 months i.e. from Dec 1, 2020 to June 30 = 28,000 x 5% x 7/12…

Q: On January 1, 2024, Tina's Tamales borrows $10,000 to purchase a delivery truck by agreeing to a 6%,…

A: Note payable: Note payable also called promissory note. It is a legal instrument in which one party…

Q: 1. Determine the estimated warranty liability on December 31, 2022. 2. Analyze the estimated…

A: Answer: We are given First year warranty = 4% Second year warranty = 10%

Q: On September 1, 2019, Melanie Corp. borrowed $101,000 in cash and executed a 6-percent,…

A: The total rate of investment a lender pays on a debt obligation during the course of borrowing is…

Q: Oriole Company borrowed $790,000 on December 31, 2019, by issuing an $790,000, 9% mortgage note…

A: Lets understand the basics. When amount is borrowed against the notes then it needs to repaid with…

Q: Metlock Co. receives $380,000 when it issues a $380,000, 15%, mortgage note payable to finance the…

A: To calculate the remaining balance of the mortgage note payable for Metlock Co. as of December 31,…

Q: On January 1, Luther Co. issued a $1,000,000, 8%, 5-year installment note payable. The first note…

A: Notes Payable:- It is a Current liability where one person is liable to pay and another one is…

Q: On July 1, 2024, Li-Ma Industries issued nine-month notes in the amount of $400 million. Interest is…

A: Notes payable, also known as promissory notes, are a type of debt that a business or individual…

Q: On September 1, 2024, Daylight Donuts signed a $186,000, 6%, six-month note payable with the amount…

A: As interest is payable after 6 months i.e. on March 1,2025 however at the year end as per accrual…

Q: Larkspur, Inc. receives $260,400 when it issues a $260,400, 10% mortgage note payable to finance the…

A: Journal: Recording of a business transactions in a chronological order.

Q: On November 1, Alan Company signed a 120-day, 12% note payable, with a face value of $19,800. What…

A: Concept used:

Q: Sunland Company borrowed $760,000 on December 31, 2019, by issuing an $760,000, 9% mortgage note…

A: Note payable refers to the agreement made between the parties to repay the sum at maturity with…

Q: Cucina Corporation signed a new installment note on January 1, 2021, and deposited the proceeds of…

A: The process of recording business transactions in the books of accounts for the first time is…

Q: On July 1, 2020, Oriole Ltd. borrowed $20,000 by signing a two-year, 4% note payable. The note is…

A: The interest expense is the amount of interest due for payment during the period. The installment…

Q: Windsor Company borrowed $49,200 on November 1, 2025, by signing a $49,200, 10%, 3-month note.…

A: The adjusting entries are journals made at year-end to correct the account balances. Adjustment…

Q: Sarah Co. borrowed OR200,000 on January 1, 2019, and signed a two-year note bearing interest at 12%.…

A: Notes payable: Notes payable can be defined as the promissory note issued by the company against the…

Q: a. Provide October 31, 2023, adjusting journal entry to record interest owing on the loan

A: Adjusting journal entry is prepared at the end of particular accounting period. It helps to provide…

Q: The balance of the Estimated Warranty Liability account was $12,000 on January 1, 2019, and $13,600…

A: When a company sells a product, it generally provides a warranty or guarantee to the customer,…

Q: Sherman Charter signed a four-month note payable in the amount of $18,000 on September 1. The note…

A: Note: Adjusting entry on September 30 will be made to record the accrued interest for the period…

Q: On September 30, 2019, Lakatan Inc. borrowed P1,000,000 on a 9% note payable. The entity paid the…

A: solution given Date of issue September 30 2019 Amount of note 1000000 Rate of…

Q: 16. On October 1, 2020, Zachary's Balloons borrowed $4,000 on a 12%, one-year note payable. Interest…

A: Semiannual Interest = $4,000 * 12% * 6/12 Semiannual Interest = $240

Q: on november 30, 2019, jenkins company loaned M.Lee $4,000 for one year at an annual interest rate…

A: Journal entry: It is a set of economic events that can be measured in monetary terms. These are…

Q: At the end of 2025, the following information is available for Great Adventures. • Additional…

A: Since you have posted a question with multiple subparts, we will provide the solution only to the…

Q: Required: the adjusting entry on December 31, 2020, will show a credit to interest payable for...

A: Adjusting entry: Adjusting journal entry is made at the end of the fiscal period to reflect the…

Q: Adjusting journal entry for: On November 1st, 2018, FTS purchased a certificate of deposit from…

A: In the given situation, assuming that the financial year ends on 31st December, for 2018 we need to…

Q: On June 1, 2021, Demer Consulting provides services to a customer for $150,000. To pay for the…

A: The journal entries are prepared to record the day to day transactions of the business during the…

Q: LARA Company secured a bank loan of $ 90,000, on 1/4/2020. In return, it signed a 10 month, 6%, note…

A: The adjustment entries are made to adjust the revenues and expenses of the current year.

Q: On September 1, 2021, Daylight Donuts signed a $112,000, 9%, six-month note payable with the amount…

A: Notes payable is considered a negotiable instrument. It is classified under the head of current…

Q: Sunland Company borrowed $760,000 on December 31, 2019, by issuing an $760,000, 9% mortgage note…

A: Journal entry is the entry that records the financial transactions initially. The transactions are…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Bill's Barber shop signed a one-year 7% bak loan payable in the amount of 5,000 on April 1, 2022.Interest is due at maturity.The adjusting journal entry on December 31, 2022, assuming adjusting entries were not previously made, would consist of

Bill's Barber Shop signed a one-year 7% bank loan payable in the amount of $5,000 on April 1, 2022. Interest is due at maturity. The
adjusting journal entry on December 31, 2022, assuming adjusting entries were not previously made, would consist of
O a debit to Interest Expense for $263 and a credit to Interest Payable for $263.
O a debit to Bank Loan Payable for $208 and a credit to Interest Payable for $208.
O a debit to Interest Expense for $350 and a credit to Interest Payable for $350.
O a debit to Interest Expense for $208 and a credit to Bank Loan Payable for $208.
eTextbook and Media
Save for Later
Attempts: 0 of 3 used
Submit Answer
N
- 0 0 << +8
106-4

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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.

Similar questions

On September 1, 2021, Daylight Donuts signed a $110,000, 10%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022.Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.) Multiple Choice $5,500. $3,667. $1,833. $0.
On April 1, 2019, Flamengo Co. signed a one-year, 8% interest-bearing note payable for $50,000. Assuming that Flamengo Co. maintains its books on a calendar year basis, how much interest expense should be reported in the 2020 income statement? a.$1,000. B.$2,000. C.$4,000. D.$3,000. Which of the alternatives results from the accrual of interest: A.Increase in liabilities and decrease in stockholders' equity. B.Increase in assets and stockholders' equity. C.Increase in assets and liabilities. D.Increase in liabilities and increase in stockholders' equity. Unfortunately, Flamengo Co. is involved in a lawsuit. When would the lawsuit be recorded as a liability on the balance sheet? A.When the loss is probable and the amount can be reasonably estimated. B.When the loss probability is reasonably possible and the amount can be reasonably estimated. C.When the loss is probable regardless of whether the loss can be reasonably estimated. D.When the loss…
Jane's Don't Company borrowed $201,000 on January 1, 2024, and signed a two-year note bearing interest at 13%. Interest is payable in full at maturity on January 1, 2026. In connection with this note, Jane's should report interest expense at December 31, 2024, in the amount of: Multiple Choice $55,396. $26,130. $52,260. $0.
PART - E Toner Limited (“Toner") borrows $180,000 on 1 July 2020 from Lighthouse Bank and signs a $180,000, 5%, 1-year promissory note. Assuming yearly accounting periods and a financial year end balance date of 31 December. Required: (i) Prepare the general journal entries to record the issuance of the promissory note. (ii) Prepare the general journal entries to record the adjusting journal entries as at 31 December 2020. (iii) Prepare the general journal entries to record the repayment on 1 July of 2021.
Please answer both. This is part A and B
The following amortization schedule indicates the interest and principal that Chip's Cookie Corporation (CCC) must repay on an installment note established January 1, 2021. CCC has a December 31 year-end and makes the required annual payments on December 31. Year 1 2 3 4 Total Beginning Notes Payable 52,000 40,629 28, 235 14,725 Repaid Principal Interest Expense on Notes Payable (a) Annual Payment (b) Interest Expense (c) Notes Payable (d-1) Total Interest (d-2) Total Principal 4,680 3,657 2,541 1,325 12, 203 11,371 12,394 13,510 14,725 52,000 Ending Notes Payable 40,629 28,235 14,725 0 Use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of interest expense to report in the year ended December 31, 2021 (Year 1); (c) the note payable balance at January 1, 2024; and (d) the total interest and total principal paid over the note's entire life. (Round your answers to the nearest whole dollar amount.)
On September 1, 2024, Daylight Donuts signed a $150,000, 8%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2025. Daylight Donuts accrued interest for the note on December 31, 2024. Which of the following would be recorded on the payment of the note plus accrued interest at maturity on March 1, 2025? (Do not round your intermediate calculations.) Multiple Choice Interest Payable of $2,000 Interest Expense of $6,000 Interest Expense of $2,000 Interest Expense of $4,000
On January 1, 2019, a company borrows $1,000 cash by signing a four-year, 5% installment note. The note requires four equal payments of $282, consisting of accrued interest and principal on December 31 of each year from 2019 through 2022. 1. Prepare an amortization table for this installment note like the one in Exhibit 14.12. 2. Prepare journal entries to record the loan on January 1, 2019, and the four payments from December 31, 2019, through December 31, 2022.
18. Melanie Corp. borrowed $101,000 cash on September 1, 2019, and signed a one-year 6%, interest-bearing note payable. The interest and principal are both due on August 31, 2020. Assume that the appropriate adjusting entry was made on December 31, 2019 and that no adjusting entries have been made during 2020. Which of the following would be the required journal entry to pay the note on August 31, 2020? Multiple Choice Interest payable2,020 Notes payable101,000 Cash 103,020 Notes payable101,000 Interest expense6,060 Cash 107,060 Interest expense6,060 Cash 6,060 Interest expense4,040 Interest payable2,020 Notes payable101,000 Cash 107,060
Global Enterprises, Inc. signed a one-year $42,000 note payable at 8% inerest on April 1, 2025. If Global only adjusts it's accounts once a year at year end, how much interest expense was accrued on December 31, 2025?
On June 1, ACME Incorporated borrows $75,000 on a six-month, 4% note. Interest and principal are to be paid at maturity. Adjusting entries are prepared annually on the June 30 year end. Required: 1. Prepare the journal entry on issuance date. 2. Prepare the year end adjusting journal entry. 3. Prepare the journal entry at maturity date. BIU A Paragraph GENERAL JOURNAL Hº OREDIT
On October 1, 2024, Green Corporation loans one of its employees $26,000 and accepts a 12-month, 8% note receivable. Calculate the amount of interest revenue Green will recognize in 2024 and 2025.