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Consider the following note payable transactions of Cabico Video Productions.   Data table: 2017   Sep.1 Purchased equipment costing $26,000 by issuing a​ one-year, 6​% note payable. Dec. 31 Accrued interest on the note payable.   2018   Sep.1 Paid the note payable plus interest at maturity.   Requirements: Journalize the transactions for the company. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)

Consider the following note payable transactions of Cabico Video Productions.   Data table: 2017   Sep.1 Purchased equipment costing $26,000 by issuing a​ one-year, 6​% note payable. Dec. 31 Accrued interest on the note payable.   2018   Sep.1 Paid the note payable plus interest at maturity.   Requirements: Journalize the transactions for the company. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Consider the following note payable transactions of Cabico Video Productions.

 

Data table:

2017
 
Sep.1 Purchased equipment costing $26,000 by issuing a​ one-year,
6​% note payable.
Dec. 31 Accrued interest on the note payable.
 
2018
 
Sep.1
Paid the note payable plus interest at maturity.
 
Requirements:
Journalize the transactions for the company. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)
**Journal Entry for Subscription Sale with Sales Tax** **Transaction Date:** October 1 **Description of Transaction:** On October 1, a six-month subscription was sold, starting on November 1. The transaction involved collecting cash amounting to $600 along with a sales tax of 6%. The task is to prepare a single compound journal entry for this transaction. **Journal Entry Table Overview:** The table is structured to assist with the recording of accounting transactions. The table includes the following columns: 1. **Date**: The date on which the transaction occurred. 2. **Accounts and Explanation**: The accounts impacted by the transaction and a brief explanation. 3. **Debit**: The debit amounts associated with the transaction. 4. **Credit**: The credit amounts associated with the transaction. Below is a detailed transcription of the journal entry table provided in the image: | Date | Accounts and Explanation | Debit | Credit | |---------|---------------------------|-------|--------| | Oct. 1 | | | | | | | | | | | | | | | | | | | **Explanation of Entry Components:** - **Date**: Marks the time the transaction was recorded. - **Accounts and Explanation**: - **Cash**: Records the asset account increased by the receipt of cash. - **Unearned Subscription Revenue**: Reflects the liability account for revenues received before they are earned. - **Sales Tax Payable**: A liability account for the sales tax that needs to be paid. - **Debit**: - Cash will be debited with the total cash received (subscription fee + sales tax). - **Credit**: - Unearned Subscription Revenue will be credited with the amount of the subscription fee. - Sales Tax Payable will be credited with the amount of the sales tax collected. Given the sale amount of $600 and a 6% sales tax, the calculations would be: - Sales Tax: $600 x 6% = $36 - Cash collected: $600 + $36 = $636 **Completed Journal Entry Example:** | Date | Accounts and Explanation | Debit | Credit | |---------|-------------------------------|-------|--------| | Oct. 1 | Cash | 636 | | | | Unearned Subscription Revenue | | 600
Transcribed Image Text:**Journal Entry for Subscription Sale with Sales Tax** **Transaction Date:** October 1 **Description of Transaction:** On October 1, a six-month subscription was sold, starting on November 1. The transaction involved collecting cash amounting to $600 along with a sales tax of 6%. The task is to prepare a single compound journal entry for this transaction. **Journal Entry Table Overview:** The table is structured to assist with the recording of accounting transactions. The table includes the following columns: 1. **Date**: The date on which the transaction occurred. 2. **Accounts and Explanation**: The accounts impacted by the transaction and a brief explanation. 3. **Debit**: The debit amounts associated with the transaction. 4. **Credit**: The credit amounts associated with the transaction. Below is a detailed transcription of the journal entry table provided in the image: | Date | Accounts and Explanation | Debit | Credit | |---------|---------------------------|-------|--------| | Oct. 1 | | | | | | | | | | | | | | | | | | | **Explanation of Entry Components:** - **Date**: Marks the time the transaction was recorded. - **Accounts and Explanation**: - **Cash**: Records the asset account increased by the receipt of cash. - **Unearned Subscription Revenue**: Reflects the liability account for revenues received before they are earned. - **Sales Tax Payable**: A liability account for the sales tax that needs to be paid. - **Debit**: - Cash will be debited with the total cash received (subscription fee + sales tax). - **Credit**: - Unearned Subscription Revenue will be credited with the amount of the subscription fee. - Sales Tax Payable will be credited with the amount of the sales tax collected. Given the sale amount of $600 and a 6% sales tax, the calculations would be: - Sales Tax: $600 x 6% = $36 - Cash collected: $600 + $36 = $636 **Completed Journal Entry Example:** | Date | Accounts and Explanation | Debit | Credit | |---------|-------------------------------|-------|--------| | Oct. 1 | Cash | 636 | | | | Unearned Subscription Revenue | | 600
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