Exercise 7-18 (Algo) Notes receivable [LO7-7]On June 30, 2021, the Esquire Company sold some merchandise to a customer for $54,000. In payment, Esquire agreed to accept a7% note requiring the payment of interest and principal on March 31, 2022. The 7% rate is appropriate in this situation.Required:1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), theDecember 31, 2021 interest accrual, and the March 31, 2022 collection. (Do not round intermediate calculations.)2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-orunderstated in 2021 and 2022?X Answer is not complete.Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goodssold), the December 31, 2021 interest accrual, and the March 31, 2022 collection. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)NoDateGeneral JournalDebitCreditJune 30, 2021Notes receivable54,000Sales revenue54,0002December 31, 202 Interest receivable1,620 XInterest revenue1,620 X3March 31, 2022CashInterest receivable1,620Interest revenueNotes receivableRequired 1Required 2 > Exercise 7-18 (Algo) Notes receivable [LO7-7]On June 30, 2021, the Esquire Company sold some merchandise to a customer for $54,000. In payment, Esquire agreed to accept a7% note requiring the payment of interest and principal on March 31, 2022. The 7% rate is appropriate in this situation.Required:1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), theDecember 31, 2021 interest accrual, and the March 31, 2022 collection. (Do not round intermediate calculations.)2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-orunderstated in 2021 and 2022?X Answer is not complete.Complete this question by entering your answers in the tabs below.Required 1RequiredIf the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes beover-or understated in 2021 and 2022? (Do not round intermediate calculations)2021 income before income taxes would beunderstated by2022 income before income taxes would beoverstatedby< Required 1

Notes receivable is considered a negotiable instrument. it is classified under current assets if the…

Exercise 7-18 (Algo) Notes receivable [LO7-7] On June 30, 2021, the Esquire Company sold some merchandise to a customer for $54,000. In payment, Esquire agreed to accept a 7% note requiring the payment of interest and principal on March 31, 2022. The 7% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection. (Do not round intermediate calculations.) 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022?

Exercise 7-18 (Algo) Notes receivable [LO7-7] On June 30, 2021, the Esquire Company sold some merchandise to a customer for $54,000. In payment, Esquire agreed to accept a 7% note requiring the payment of interest and principal on March 31, 2022. The 7% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection. (Do not round intermediate calculations.) 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022?

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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Required information Exercise 7-5 (Algo) Notes payable—discount basis LO 2 Skip to question [The following information applies to the questions displayed below.] On April 15, 2019, Powell Inc. obtained a six-month working capital loan from its bank. The face amount of the note signed by the treasurer was $255,400. The interest rate charged by the bank was 5.00%. The bank made the loan on a discount basis. Exercise 7-5 (Algo) Part a Required:a-1. Calculate the loan proceeds made available to Powell.
Problem 5-9 (Algo) Noninterest-bearing note; annuity and lump-sum payment [LO5-3, 5-8] On January 1, 2024, The Barrel Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $35,000 on each December 31 beginning on December 31, 2024, and a lump-sum payment of $250,000 on December 31, 2028. A 12% interest rate properly reflects the time value of money in this situation. Required: Calculate the amount at which Barrel should record the note payable and corresponding merchandise purchased on January 1, 2024. Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Time values are based on: n = Cash Flow i= Amount Present Value Payments Lump Sum Amount recorded
! Required information Problem 11-1A (Algo) Short-term notes payable transactions and entries LO P1 [The following information applies to the questions displayed below.] Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $38,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $3,000 in cash. July 8 Borrowed $60,000 cash from NBR Bank by signing a 120-day, 11%, $60,000 note payable. _?____Paid the amount due on the note to Locust at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. November 28 Borrowed $24,000 cash from Fargo Bank by signing a 60-day, 8%, $24,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 _______ Paid the amount due on the note to Fargo Bank at the maturity date. Problem 11-1A (Algo) Part 3 3.…
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10- SK Inc, factors $400,000 of accounts receivable with Mars Finance Company on a without recourse basis on July 1,2020. The receivables records are transferred to Mars Finance, which will receive the collections. Mars Finance assesses a finance charge of 1 ½% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale.Instructions:a) Prepare the journal entry on July1,2020, for SK Inc. to record the sale of receivables without recourse.b) Prepare the journal entry on July1,2020, for Mars Finance Company. to record the purchase of receivables without recou
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Required information [The following information applies to the questions displayed below.] Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $36,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 8%, $35,000 note payable along with paying $1,000 in cash. July 8 Borrowed $57,000 cash from NBR Bank by signing a 120-day, 11%, $57,000 note payable. note to Locust at the maturity date. Paid the amount due on the Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $33,000 cash fro Fargo Bank by signing a 60-day, 7%, $33,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 _____?_ Paid the amount due on the note to Fargo Bank at the maturity date. Required: 1. Determine the maturity date for each of the three notes described. Maturity date Locust NBR Bank Fargo Bank