Marydale Products permits its customers to defer payment by giving personal notes instead of cash. All the notes bear interest and require the customer to pay the entire note in a single payment 6 months after issuance. Consider the following transactions, which describe Marydale's experience with two such notes: a. On October 31, 2019, Marydale accepts a 6-month, 10% note from Customer A in lieu of a $4,200 cash payment for services provided that day. b. On February 28, 2020, Marydale accepts a 6-month, $1,800, 7% note from Customer B in lieu of a $1,800 cash payment for services provided on that day. c. On April 30, 2020, Customer A pays the entire note plus interest in cash. d. On August 31, 2020, Customer B pays the entire note plus interest in cash. Required: Prepare the necessary journal and adjusting entries required to record Transactions a through d in Marydale's records. PAGE 2019 PAGE 2020 IMPACT ON FINANCIAL STATEMENTS JOURNAL BALANCE SHEET INCOME STATEMENT DATE ASSETS LIABILITIES REVENUE EXPENSES NET INCOME DESCRIPTION POST. REF. DEBIT CREDIT EQUITY 1 2 3 4 1, 2.
Marydale Products permits its customers to defer payment by giving personal notes instead of cash. All the notes bear interest and require the customer to pay the entire note in a single payment 6 months after issuance. Consider the following transactions, which describe Marydale's experience with two such notes: a. On October 31, 2019, Marydale accepts a 6-month, 10% note from Customer A in lieu of a $4,200 cash payment for services provided that day. b. On February 28, 2020, Marydale accepts a 6-month, $1,800, 7% note from Customer B in lieu of a $1,800 cash payment for services provided on that day. c. On April 30, 2020, Customer A pays the entire note plus interest in cash. d. On August 31, 2020, Customer B pays the entire note plus interest in cash. Required: Prepare the necessary journal and adjusting entries required to record Transactions a through d in Marydale's records. PAGE 2019 PAGE 2020 IMPACT ON FINANCIAL STATEMENTS JOURNAL BALANCE SHEET INCOME STATEMENT DATE ASSETS LIABILITIES REVENUE EXPENSES NET INCOME DESCRIPTION POST. REF. DEBIT CREDIT EQUITY 1 2 3 4 1, 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Marydale Products permits its customers to defer payment by giving personal notes instead of cash. All the notes
bear interest and require the customer to pay the entire note in a single payment 6 months after issuance.
Consider the following transactions, which describe Marydale's experience with two such notes:
a. On October 31, 2019, Marydale accepts a 6-month, 10% note from Customer A in lieu of a $4,200
cash payment for services provided that day.
b. On February 28, 2020, Marydale accepts a 6-month, $1,800, 7% note from Customer B in lieu of a
$1,800 cash payment for services provided on that day.
c. On April 30, 2020, Customer A pays the entire note plus interest in cash.
d. On August 31, 2020, Customer B pays the entire note plus interest in cash.
Required:
Prepare the necessary journal and adjusting entries required to record Transactions a through d in
Marydale's records.
Transcribed Image Text:PAGE 2019
PAGE 2020
IMPACT ON FINANCIAL STATEMENTS
JOURNAL
BALANCE SHEET
INCOME STATEMENT
DATE
ASSETS
LIABILITIES
REVENUE
EXPENSES
NET INCOME
DESCRIPTION
POST. REF.
DEBIT
CREDIT
EQUITY
1
2
3
4
1,
2.
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