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, 12% note from Customer A in lieu of a $4,800 cash payment for services provided that day.b.On February 28, 2020, Marydale accepts a 6-month, $3,000, 5% note from Customer B in lieu of a $3,000 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.

Journal is a place where accounting transactions are listed in the book keeping system before ledger…

Answered: Marydale Products permits its customers…

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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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, 12% note from Customer A in lieu of a $4,800 cash payment for services provided that day.
b.	On February 28, 2020, Marydale accepts a 6-month, $3,000, 5% note from Customer B in lieu of a $3,000 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.

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