During the beginning of 2024 one of Zain's customers Erika Rogers was experiencing cash flow problems and was unable to pay her $19, 120 account to Zain MangementGroup. Zain Management Group agreed to substitute a two-year note for the open account starting on January 1st, 2024. Zain issued a two year non-interest bearingnote. The note has an implied interest rate of 6%. Prepare the journal or adjusting entries for the note for the two years. Make sure to put the dates of your entrie

A journal entry is a formal accounting record that documents a financial transaction by recording…

Answered: During the beginning of 2024 one of…

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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Kingbird County Bank agrees to lend the Ivanhoe Brick Company $492000 on January 1. Ivanhoe Brick signs a $492000, 6%, 9-month note. What entry will Ivanhoe Brick make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?
The company has a mortgage note payable for $1,500,000 that comes due in year 3. this note is paid by the signing of a new 14% note for the amount due. how do I prepare the journal entry to record this refinancing of the old note?
Swathmore Clothing Corporation grants its customers 30 days' credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 2% times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly. At the end of 2023, accounts receivable were $610,000 and the allowance account had a credit balance of $74,000. Accounts receivable activity for 2024 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance The company's controller prepared the following aging summary of year-end accounts receivable: Summary Age Group $ 610,000 2,800,000 (2,663,000) (57,000) $ 690,000 0-60 days 61-90 days 91-120 days over 120 days Total Amount $ 460,000 78,000 67,000 85,000 $ 690,000 Percent Uncollectible 44 15 26 41 Required: 1. Prepare a summary…
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Raindrop Inc owes a past due bill to Jax Corp. On August 8, Jax agrees to accept a $5000, 8%, 120-day note as payment from Raindrop. On October 11, Jax discounts the note at Park Bank at 9%. Find the: (a) original interest and Maturity Value that Raindrop will pay, (b) discount period for Park Bank (c) Park Bank’s discount, and (d) Jax’s proceeds
Harper Company recently experienced a temporary delay in cash collections and needed to borrow $204,000 on November 1 of the current year to pay trade accounts payable. The 6-month, 3% note and interest are due on May 1 of the following year. Harper has a December 31 fiscal year-end. What are the required journal entries to record the issuance of the note, accrued interest, and the payment of principal and interest at maturity? Begin by preparing journal entry to record the issuance of the note. (Record debits first, then credits. Exclude explanations from any journal entries.) Account November 1
On March 1. LGE asks to extend its past-due $9,200 account payable to Tyson. Tyson agrees to accept $2,200 cash and a 180 day. 8% $7,000 note payable to replace the account payable. Note: Use 360 days a year. (0) Prepare the March 1 entry for LGE. (2) Prepare the August 28 entry for LGE when it pays the note and interest to Tyson. Please use the picture and insert where the answers go!!
Following are selected transactions of Youth Inc. during December 2016. Dec 1: Youth accepted a one year 8% note receivable from a new customer, GGC. The note is in settlement of an existing $1,500 account receivable. The note plus interest is due on November 30, 2016. Dec 8: An account receivable from JJ in the amount of $700 is determined to be uncollectible and is written off against the Allowance for Doubtful Accounts. Dec 15: Received $200 from one of its clients. Originally this amount was written off as uncollectible since Youth never expected to receive this amount from its client. Additional information for adjusting entries is as follows: An aging of accounts receivable indicates very likely uncollectible accounts totaling $9,000. Prior to the month-end adjustment, the Allowance for Doubtful Accounts had a credit balance of $5,210. Accrued interest revenue on the note receivable from GGC dated December 1, 2016. Prepare the journal entries for December…
On December 1, 2022, Old Car Co. borrowed money at the bank by signing a 90-day non-interest-bearing note for $30,000 that was discounted at 10%. Which of the following entries is correct?
Mystic Magic issued a $140,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 10.4% annual interest rate. Amy Arnold does not pay on her account and dishonors the note. On November 10, 2018, Mystic Magic decides to sell the dishonored note to a collection agency for 35% of its value. Record the journal entries for Mystic Magic for the following transactions. If an amount box does not require an entry, leave it blank. Round your answers to two decimal places. A. Initial sale on January 1, 2018 B. Dishonored note entry on Oct 1, 2018 C. Receivable sale on November 10, 2018 A. Jan. 1, 2018
Cucina Corporation signed a new installment note on January 1, 2021, and deposited the proceeds of $51,800 in its bank account. The note has a 3-year term, compounds 5 percent interest annually, and requires an annual installment payment on December 31. Cucina Corporation has a December 31 year-end and adjusts its accounts only at year-end. Required: 1. Use an online application, such as the loan calculator with annual payments at mycalculators.com, to complete the amortization schedule. 2. Prepare the journal entries on (a) January 1, 2021, and December 31 of (b) 2021, (c) 2022, and (d) 2023. 3. If Cucina Corporation's year-end were March 31, rather than December 31, prepare the adjusting journal entry it would make for this note on March 31, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Use an online application, such as the loan calculator with annual payments at mycalculators.com, to complete the amortization schedule. (Do…
Anne Taylor comapany borrowed cash on august 1 of year 1, by signing a $46,620(face amount), one year note payable, due on july 31 of year 2. the accounting period of Anne yalor ends December 31. Assume an effective interest rate of 11%. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note?

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