North Face is one of the world's most popular outdoor apparel companies. Assume that North Face borrows $2.2 million from U.S.Bank and signs a note promising to pay back the $2.2 million in nine months, at which time North Face also will pay any accruedinterest. The interest rate on the note is 8 percent.Required:1. Prepare the journal entry North Face will record when it signs the note and receives the cash.2. Prepare the journal entry that North Face will record when it pays off the note and any accrued interest after nine months.(For all requirements, if no entry is required for a transaction/event, select "No journal entry required" in the first account field.Enter your answers in whole dollars not in millions (i.e., 1,000,000 not 1.0).)

Requirement 1: Journal Entry When North Face Signs the Note and Receives the CashStep 1: Identify…

Answered: North Face is one of the world's most…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 10P

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Springer Products wishes to borrow $90,000 from a local bank using its accounts receivable to secure the loan. The bank's policy is to accept as collateral any accounts that are normally paid within 30 days of the end of the credit period, as long as the average age of the account is not greater than the customer's average payment period. Springer's accounts receivable, their average ages, and the average payment period for each customer are shown in the following table: Customer Accounts Receivable Average age of account Average payment period of customer A $11,000 42 days 50 days B $25,000 70 days 65 days C $10,000 48 days 45 days D $28,000 55 days 50 days E $14,000 50 days 60 days F $19,000 21 days 35 days G $30,000 10 days 30 days H $16,000 25 days 40 days…
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P. nil
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