Ehler Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2022, Ehler had the following transactions related to notes payable. Sept. 1 Sept. 30 Oct. 1 Oct. 31 Nov. 1 Nov. 30 Dec. 1 Dec. 31 Issued a $12,000 note to Pippen to purchase inventory. The 3-month note payable bears interest of 6% and is due December 1. (Ehler uses a perpetual inventory system.) Recorded accrued interest for the Pippen note. Issued a $16,500,8%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Recorded accrued interest for the Pippen note and the Prime Bank note. Issued a $26,000 note and paid $8,000 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months. Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note. Paid principal and interest on the Pippen note. Recorded accrued interest for the Prime Bank note and the vehicle note.

Ehler Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2022, Ehler had the following transactions related to notes payable. Sept. 1 Sept. 30 Oct. 1 Oct. 31 Nov. 1 Nov. 30 Dec. 1 Dec. 31 Issued a $12,000 note to Pippen to purchase inventory. The 3-month note payable bears interest of 6% and is due December 1. (Ehler uses a perpetual inventory system.) Recorded accrued interest for the Pippen note. Issued a $16,500,8%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Recorded accrued interest for the Pippen note and the Prime Bank note. Issued a $26,000 note and paid $8,000 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months. Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note. Paid principal and interest on the Pippen note. Recorded accrued interest for the Prime Bank note and the vehicle note.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Gadubhai
Vinubhai
Prepare the journal entries to record the transactions on the books of Audrey Company.
Admire County Bank agrees to lend Bonita Brick Company $609000 on January 1. Bonita Brick Company signs a $609000, 8%, 9- month note. What entry will Bonita Brick Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30? O O Notes Payable Cash Notes Payable Interest Payable Cash Interest Expense Notes Payable Cash Interest Payable Notes Payable Interest Expense Cash 645540 609000 36540 36540 609000 24360 609000 12180 645540 645540 645540 645540
Example 4 (Notes Receivable): On November 30, 2020, James Co. lent money to Scott Co. and issued a 5-month, $120,000, 8% note receivable. Scott paid James the full amount of interest and principal on April 30, 2021. What is the journal entry for James Co. to record the issuance of the note receivable? What is the end-of-year adjusting journal entry for James Co. to record interest revenue earned as of December 31?
26 )
On August 1, 2021, Avonette, Inc., sold equipment and accepted a six-month, 9%, $50,000 note receivable. Avonette's year-end is December 31. Which of the following accounts will Avonette credit in the journal entry at maturity on February 1, 2022, assuming collection in full? O A. Interest Receivable B. Cash OC. Interest Payable O D. Note Payable
Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2021. The note, along with interest at 9%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 12%. Required: Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale.
Lewis Company had the following transactions involving notes payable. July 01, 2022 ... Borrows $50,000 from First Bank signing a 9-month, 8% note. Nov 01, 2022 ... Borrows $60,000 from Lyon Bank signing a 3-month, 6% note. Dec 31, 2022 ... Prepares annual adjusting entries. Feb 01, 2023... Pays principal and interest to Lyon Bank. Apr 01, 2023... Pays principal and interest to First National Bank. July 01 2022 Nov 01 2022 Dec 31 2022 Feb 01 2023 Apr 01 2023 On day note is created - is there interest exp? Or just the principal? DR 8% int $ DR 6% int $ CR Total $ 2 diff entries! A single CR to for each entry. Each entry pays note principal (can't be more), PLUS interest (and any publ from adj). Interest calc: Principal x Interest % = a full years int exp. BUT, notes often less than a full year. "Term" (length) of the note tells how many of the 12 months (or 365 days) apply. Eliminate any Int Pobl if ADJ were needed cuz some INT EXP is 2022, and some is 2023.
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?
Flounder, Inc. issued a $115,000, 4-year, 12% note at face value to Flint Hills Bank on January 1, 2025, and received $115,000 cash. The note requires annual interest payments each December 31. Prepare Flounder's journal entries to record (a) the issuance of the note and (b) the December 31 interest payment.
Question. Jamaica Corporation carried out the following transactions involving note payable. During the fiscal year ended December 31, 2020. Aug 6 Borrowed $ 15,200 from Tony Stark, issuing to him a 45 da, 14% note payable. Sept. 16 Purchased office equipment from Ikea Company. The invoice amount was $18,800 and Ikea Company agreed to accept as full payment a 3-month, 15% note for the invoice amount. Sept. 20 Paid Tony Stark note plus accrued interest. Nov.1 Borrowed $ 2,35,000 from Nation Commercial Bank at an interest rate of 12% per annum; signed a 90-days note payable for $ 2,42,256, which included a $7,056 interest charge in the face amount. Dec.1 Purchased merchandise in the amount of $13,000 from Stephens & Co. Gave in settlement a 60-day note nearing interest at 15% (Perpetual inventory system is deployed). Dec. 16 The $18,800 note payable to Ikea Company matured today. Paid the interest accrued and issued new 30-days, 12% note to replace the maturing…