General accounting Michigan Bank lends Canton Furniture Company$100,000 on December 1. Canton Furniture Companysigns a $100,000, 8%, 4 minus-month note. The totalcash paid at maturity of the note is:A. $102,666.67B. $100,000C. $108,000D. $106,000

Step 1: Define Accrued InterestAccrued interest expense is the amount of interest that has been…

Answered: Michigan Bank lends Canton Furniture…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 3CE

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
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Michigan Bank lends Canton Furniture Company $100,000 on December 1. Canton Furniture Company signs a $100,000, 8%, 4 minus-month note. The total cash paid at maturity of the note is: A. $102,666.67 B. $100,000 C. $108,000 D. $106,000