Lundquist Company received a 60-day, 6% note for $37,500, dated July 23, from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume 360 days in a year. c. Journalize the entry to record the receipt of the payment of the note at maturity.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Lundquist Company received a 60-day, 6% note for $37,500, dated July 23, from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume 360 days in a year. c.
| ASSETS | |
| 110 | Cash |
| 111 | Petty Cash |
| 120 | |
| 129 | Allowance for Doubtful Accounts |
| 132 | Notes Receivable |
| 141 | Merchandise Inventory |
| 145 | Office Supplies |
| 146 | Store Supplies |
| 151 | Prepaid Insurance |
| 181 | Land |
| 191 | Store Equipment |
| 192 | |
| 193 | Office Equipment |
| 194 | Accumulated Depreciation-Office Equipment |
| LIABILITIES | |
| 210 | Accounts Payable |
| 211 | Salaries Payable |
| 213 | Sales Tax Payable |
| 214 | Interest Payable |
| 215 | Notes Payable |
| EQUITY | |
| 310 | Owner, Capital |
| 311 | Owner, Drawing |
| 312 | Income Summary |
| REVENUE | |
| 410 | Sales |
| 610 | Interest Revenue |
| EXPENSES | |
| 510 | Cost of Merchandise Sold |
| 520 | Sales Salaries Expense |
| 521 | Advertising Expense |
| 522 | Depreciation Expense-Store Equipment |
| 523 | Delivery Expense |
| 524 | Repairs Expense |
| 529 | Selling Expenses |
| 530 | Office Salaries Expense |
| 531 | Rent Expense |
| 532 | Depreciation Expense-Office Equipment |
| 533 | Insurance Expense |
| 534 | Office Supplies Expense |
| 535 | Store Supplies Expense |
| 536 | Credit Card Expense |
| 537 | Cash Short and Over |
| 538 | |
| 539 | Miscellaneous Expense |
| 710 |
|
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