A business issued a 60-day note for $99,000 to a creditor on account. The note was discounted at 7%.Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity. Assume a 360-day year. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest whole dollar. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS110Cash111Accounts Receivable112Interest Receivable113Notes Receivable115Inventory116Supplies118Prepaid Insurance120Land123Building124Accumulated Depreciation-Building125Office Equipment126Accumulated Depreciation-Office Equipment LIABILITIES210Accounts Payable213Interest Payable214Notes Payable215Salaries Payable216Social Security Tax Payable217Medicare Tax Payable218Employees Federal Income Tax Payable219Employees State Income Tax Payable221Retirement Savings Deductions Payable224Federal Unemployment Tax Payable225State Unemployment Tax Payable226Vacation Pay Payable227Unfunded Pension Liability228Product Warranty Payable229EPA Fines Payable230Litigation Claims Payable EQUITY310Common Stock311Retained Earnings312Dividends313Income Summary REVENUE410Sales610Interest Revenue EXPENSES510Cost of Goods Sold520Salaries Expense524Depreciation Expense-Building525Delivery Expense526Repairs Expense529Selling Expenses531Rent Expense532Depreciation Expense-Office Equipment533Insurance Expense534Supplies Expense535Payroll Tax Expense536Vacation Pay Expense537Pension Expense538Cash Short and Over539Product Warranty Expense540Damage Awards and Fines541Miscellaneous Expense710Interest Expense Journal a. Journalize the entries to record the issuance of the note on March 1. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest whole dollar.PAGE 1 JOURNALACCOUNTING EQUATION DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 2 3 b. Journalize the entries to record the payment of the note at maturity. Assume a 360-day year. Refer to the Chart of Accounts for exact wording of account titles.PAGE 2 JOURNALACCOUNTING EQUATION DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 2

Solution: Issuance of note to a creditor on accounts means a note payable issued to the creditor for…

Answered: business issued a 60-day note for…

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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A business issued a 60-day note for $99,000 to a creditor on account. The note was discounted at 7%.

Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity. Assume a 360-day year. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest whole dollar.

Chart of Accounts

CHART OF ACCOUNTS

General Ledger

	ASSETS
110	Cash
111	Accounts Receivable
112	Interest Receivable
113	Notes Receivable
115	Inventory
116	Supplies
118	Prepaid Insurance
120	Land
123	Building
124	Accumulated Depreciation-Building
125	Office Equipment
126	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
213	Interest Payable
214	Notes Payable
215	Salaries Payable
216	Social Security Tax Payable
217	Medicare Tax Payable
218	Employees Federal Income Tax Payable
219	Employees State Income Tax Payable
221	Retirement Savings Deductions Payable
224	Federal Unemployment Tax Payable
225	State Unemployment Tax Payable
226	Vacation Pay Payable
227	Unfunded Pension Liability
228	Product Warranty Payable
229	EPA Fines Payable
230	Litigation Claims Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends
313	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Salaries Expense
524	Depreciation Expense-Building
525	Delivery Expense
526	Repairs Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Supplies Expense
535	Payroll Tax Expense
536	Vacation Pay Expense
537	Pension Expense
538	Cash Short and Over
539	Product Warranty Expense
540	Damage Awards and Fines
541	Miscellaneous Expense
710	Interest Expense

Journal

a. Journalize the entries to record the issuance of the note on March 1. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest whole dollar.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3

b. Journalize the entries to record the payment of the note at maturity. Assume a 360-day year. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 2

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

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