GL901 (Algo) - Based on Problem 09-1A LO P1 The January 1, Year 1 trial balance for the Lewis Company is found on the trial balance tab. The beginning balances are assumed. Carter Company entered into the following transactions involving short-term liabilities. (Use 360 days a year.) Year 1 April 20 Purchased $42,750 of merchandise on credit from Griffin, terms n/30. May 19 Replaced the April 20 account payable to Griffin with a 90-day, 12%, $36,000 note payable along with paying $6,750 in cash. July 8 Borrowed $96,000 cash from NMR Bank by signing a 120-day, 6%, $96,000 note payable. August 17 Paid the amount due on the note to Griffin at the maturity date. November 5 Paid the amount due on the note to NMR Bank at the maturity date. November 28 Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8%, $57,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Austin Bank. Year 2 January 27 Paid the amount due on the note to Austin Bank at the maturity date.
GL901 (Algo) - Based on Problem 09-1A LO P1 The January 1, Year 1 trial balance for the Lewis Company is found on the trial balance tab. The beginning balances are assumed. Carter Company entered into the following transactions involving short-term liabilities. (Use 360 days a year.) Year 1 April 20 Purchased $42,750 of merchandise on credit from Griffin, terms n/30. May 19 Replaced the April 20 account payable to Griffin with a 90-day, 12%, $36,000 note payable along with paying $6,750 in cash. July 8 Borrowed $96,000 cash from NMR Bank by signing a 120-day, 6%, $96,000 note payable. August 17 Paid the amount due on the note to Griffin at the maturity date. November 5 Paid the amount due on the note to NMR Bank at the maturity date. November 28 Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8%, $57,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Austin Bank. Year 2 January 27 Paid the amount due on the note to Austin Bank at the maturity date.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:**GL901 (Algo) - Based on Problem 09-1A LO P1**
**Overview:**
The January 1, Year 1 trial balance for the Lewis Company is foundational, with beginning balances assumed. This exercise focuses on Carter Company's transactions involving short-term liabilities. The calculations use a 360-day year convention for simplicity.
**Year 1 Transactions:**
- **April 20:** Purchased $42,750 of merchandise on credit from Griffin, with terms n/30.
- **May 19:** Converted the April 20 account payable to a 90-day, 12% note payable for $36,000, also paying $6,750 in cash.
- **July 8:** Secured a $96,000 cash loan from NMR Bank by signing a 120-day, 6% note payable.
- **August 17:** Paid off the amount due on the note to Griffin on the maturity date.
- **November 5:** Settled the note with NMR Bank at its maturity.
- **November 28:** Borrowed $57,000 from Austin Bank through a 60-day, 8% note payable.
- **December 31:** Recorded an adjusting entry for accrued interest on the note with Austin Bank.
**Year 2 Activities:**
- **January 27:** Paid the amount due on the note to Austin Bank at maturity.
**Instructions:**
- Navigate through tabs such as Requirement, General Journal, General Ledger, Trial Balance, Schedule of Payables, Calculation of Interest, and Year 2 Payment for comprehensive management of the entries.
- Use the "Calculation of Interest" tab to ensure precision in entries.
**Additional Content:**
A "Journal entry worksheet" is provided, divided into steps for managing entries with a pagination option to switch between entries.
This document is intended for educational purposes, offering students a practical understanding of managing short-term liabilities and journal entry preparation.
Transcribed Image Text:**Journal Entry Worksheet Example**
**Transaction Detail:**
- **Date:** April 20
- **Transaction:** Purchased $42,750 of merchandise on credit from Griffin, terms n/30.
**Instructions:**
- Enter debits before credits in the worksheet below.
**Journal Entry Format:**
| Date | Account Title | Debit | Credit |
|---------|---------------|-------|--------|
| April 20 | | | |
| | | | |
| | | | |
**Buttons:**
- **Record entry**: Use this button to save your journal entry.
- **Clear entry**: Use this button to remove the current entry and start over.
- **View general journal**: Click to access the complete general journal.
This worksheet is designed to assist students in learning the basics of journal entries in accounting. Enter all necessary details for each financial transaction, ensuring debits precede credits as per standard accounting practice.
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