On July 1, Orcas Lab issued a $100,000, 12%, eight-month note. Interest is payable at maturity. What is theamount of interest expense that should be recorded in a year-end adjusting entry if the fiscal year-end is (a)December 31? (b) September 30?

On July 1, Orcas Lab issued a $100,000, 12%, eight-month note. Interest is payable at maturity. What is theamount of interest expense that should be recorded in a year-end adjusting entry if the fiscal year-end is (a)December 31? (b) September 30?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On September 1, Purifier Company borrowed $12,000 on a 6-month, 4%, short-term note payable. How…

A: Interest expense recorded on December 3 = Amount borrowed x rate of interest x No. of months / 12…

Q: date Face Rate% Term aug. 8. 45000.…

A: Income statement is an important lifeline of accounting as it defines a companies financial position…

Q: ABC company issued a promissory note to DEF bank. Details from the promissory note as follows: Date…

A: Promissory note is the written note prepared where promisor promises to the promise to pay the…

Q: the amount of interest expense

A: The note payable is a liability account which is a written promissory note.It is usually considered…

Q: On October 12, 2020, Golf Co. received from one of its customers, Ping Co., a $30,500, 8% 90 day…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: On October 12, 2020, Golf Co. received from one of its customers, Ping Co., a $30,500, 8% 90 day…

A: Interest accrued on December 31, 2020 = Face value of note x interest rate x no. of days/360 =…

Q: On December 1, 2020, Shaw Company accepted from Bogner a $10,000, 3-month, 8% note in lieu of an…

A: Journal entries are used by the management to record the transactions in the books of accounts.…

Q: A company has the following December 31 year-end unadjusted balances: Allowance for Sales Discounts,…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: Prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the…

A: Given in the question:Borrowed Amount = $60,000,000Issued Period = 09 MonthsRate of Interest =…

Q: b. On September 1, 2019 the Robbem Co. received a $30,000 note receivable from a customer in…

A: December 31, 2019 = Face value of note x rate of interest x No. of months / 12 = $30,000 x 12% x…

Q: On July 1, 2024, LI-Ma Industries issued nine-month notes in the amount of $400 million. Interest is…

A: Interest expense is the amount of cost incurred by the entity on the payment of interest on notes,…

Q: Justin Company signed a $90,000, three-month, 9% note payable, on December 1. If the accounting…

A: Interest accrued on December 31= Face value of bonds x rate of interest x no. of month/12 = $90000 x…

Q: A company purchased a certificate of deposit (a short-term investment that pays interest to the…

Q: on december 1st Daw company accepts a $18,000, 45-day, 10% note from a customer. 1. prepare the…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: On July 8, Jones Inc. issued an $85,000, 8%, 120-day note payable to Miller Company. Assume that the…

A: From July 8 to July 31 = 23 days Interest expense has been accrued for 23 days for the note payable.…

Q: On October 1, Eder Fabrication borrowed $84 million and issued a nine-month, 15% promissory note.…

A: Prepare the journal entry for the issuance of the note:

Q: On July 1, 2024, Li-Ma Industries issued nine-month notes in the amount of $400 million. Interest is…

A: Notes payable, also known as promissory notes, are a type of debt that a business or individual…

Q: On January 1, 2025, Cullumber Corporation issued $610,000 of 9% bonds, due in 10 years. The bonds…

A: The bonds are issued at a premium when the interest earnings on bonds are more than the interest…

Q: Journalize the following, assuming a 360-day year is used for interest calculations: Apr. 30…

A: Interest Expense = 150,000 x 6% x 30 / 360 = $750

Q: On July 1, Orcas Lab issued a $320,000, 12%, 8-month note. Interest is payable at maturity. What is…

A: To calculate the amount of interest expense for the year-end adjusting entries, we need to determine…

Q: On July 8, Jones Inc. issued an $84,700, 11%, 120-day note payable to Miller Company. Assume that…

A: Annual Interest=Issue amount×Interest rate=$84,700×11%=$9,317

Q: ABC Company received a ten-month, $18,000, 4% note from XYZ Corporation on April 1, 2020 to replace…

A: Formula: Interest amount = Principal amount xx interest rate Multiplying principal amount with…

Q: On Sept 1, 2021, Firm A issued a 9-month, 12% promissory note in exchange for cash of $240,000.…

A: In this question, we need to pass journal entry for: Issuance of Notes. Adjusting entry for accrual…

Q: promissory note for $800 dated January, 15, requires an interest payment of $ 130at maturity. If…

A: Promissory notes are notes that carry the specified interest rate and promises to bearer of note…

Q: Sherman Charter signed a four-month note payable in the amount of $18,000 on September 1. The note…

A: Note: Adjusting entry on September 30 will be made to record the accrued interest for the period…

Q: On October 1, 2022, Bramble Company issued an $828000, 9%, 9-month interest-bearing note. If the…

A: Under accrual basis accounting, the expenses and revenues are recorded in the period they are…

Q: Sayed Company borrowed $40,000 on August 31, 2020, by issuing an 9-month, 9% interest-bearing note.…

A: Given, Interest rate = 9% Issuing Date = 31st August 2020 Borrowing Amount = $40,000

Q: n April 12, Hong Company agrees to accept a 60-day, 8%, $7,800 note from Indigo Company to extend…

A: Notes payable is debited by $7,800 since notes payable is a liability and a decrease in liability is…

Q: Philip Company has a P200,000, 9%, 120-day note receivable outstanding on December 31. The note is…

A: Here in this question, we are required to pass journal entry for the interest accrual. When any…

Q: On 1st Sept 2020 Sun and sand LLC has accepted a note receivable for RO 2000 from one of the…

A: Notes payable is considered as a negotiable instrument signed by the promisor who agreed to pay a…

Q: A company borrowed P100,000 on September 30, 2019 by signing a six-month note that specifies…

A: The notes payable is a contract which specifies a payment to be made after a specified period along…

Q: On July 8, Jones Inc. issued an $69,300, 6%, 120-day note payable to Miller Company. Assume that the…

A: Notes payable is a negotiable instrument signed by the promisor who agreed to pay a certain amount…

Question

100%

On July 1, Orcas Lab issued a $100,000, 12%, eight-month note. Interest is payable at maturity. What is the
amount of interest expense that should be recorded in a year-end adjusting entry if the fiscal year-end is (a)
December 31? (b) September 30?

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

4. Determine the ending balance of AccountsReceivable as of December 31, 2019. 5. What is the net realizable value of thereceivables at the end of 2019? 6. The company has a notes receivable ofRp24,000 at January 15, 2019 for 3 months at10% interest rate. Prepare journal entry as ofApril 15, 2019, on its due date.
On April 12 Hong co. agrees to accept a 60 day, 6% 6,900 note from indigo co to extend the due date on an overdue account. What is the journal entry the indigo co would make when it record payment of note on maturity date (use 360 days a year)
On April 12 Hong co. agrees to accept a 60 day, 6% 6,900 note from indigo co to extend the due date on an overdue account. What is the journal entry the indigo co would make when it record payment of note on maturity date (use 360 days a year)
On July 8, Jones Inc. issued an $67,200, 9%, 120-day note payable to Miller Company. Assume that the fiscal year of Jones ends July 31. Using a 360-day year, what is the amount of interest expense recognized by Jones in the current fiscal year? When required, round your answer to the nearest dollar. a. $6,048 b. $1,158 c. $386 d. $772
A noninterest-bearing note is issued on February 12 of a non-leap year in the amount of $14,250. It has a term of 10 months. It is sold on September 22 with a negotiated interest rate of 2%. Determine the proceeds of the sale. Add 3 days grace period. Select one: a. $14184.71 b. $12193.87 c. none d. $13189.29 Check
At December 31, 2021, Sheridan Company had a five-month, 5%, $79,200 note receivable that was issued on October 1, 2021. Interest and principal are payable at maturity on March 1, 2022. Prepare the December 31, 2021, adjusting entry for accrued interest. Prepare the January 1, 2022, reversing entry.
On July 1, Orcas Lab issued a $200,000, 7%, 8-month note. Interest is payable at maturity. What is the amount of interest expense that should be recorded in a year-end adjusting entry if the fiscal year-end is (a) December 31? (b) September 30?
On June 1, ACME Incorporated borrows $75,000 on a six-month, 4% note. Interest and principal are to be paid at maturity. Adjusting entries are prepared annually on the June 30 year end. Required: 1. Prepare the journal entry on issuance date. 2. Prepare the year end adjusting journal entry. 3. Prepare the journal entry at maturity date. BIU A Paragraph GENERAL JOURNAL Hº OREDIT
On January 1, Luther Co. issued a $1,000,000, 5 year, 8% installment note payable with payments of $200,000 principal plus interest due on January 1 of each year for the next 5 years. Prepare the adjusting journal entry at December 31 to accrue interest for the year (you can attach Excel or Word rather than typing in answer box).