On November 1, 2021, FDN Trading accepted a 90-day, 8% P4,000,000 note from ABC Co. FDN immediately discounted with recourse the note to a bank that offers a 12% discount rate. FDN assumes the interest expense associated with this transaction. How much interest expense should FDN Trading debit on its records? Calculate the total interest expense and NOT the net interest expense.
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- Vaughn Manufacturing lends Pina Colada industries $51600 on August 1, 2022, accepting a 9-month, 12% interest note. If Vaughn Manufacturing accrued interest at its December 31, 2022 year-end, what entry must it make to record the collection of the note and interest at its maturity date? Cash 56244 Notes Receivable 51600 Interest Revenue 4644 Cash 56244 Notes Receivable 51600 Interest Receivable 2580 Interest Revenue 2064 Cash 56244 Notes Receivable 56244 Notes Receivable 51600 Interest Receivable 2580 Interest Revenue 2064 Cash 56244Hogan Company uses the net method of accounting for sales discounts. Hogan offers trade discounts to variousgroups of buyers.On August 1, 2018, Hogan factored some accounts receivable on a without recourse basis. Hogan incurred afinance charge.Hogan also has some notes receivable bearing an appropriate rate of interest. The principal and total interestare due at maturity. The notes were received on October 1, 2018, and mature on September 30, 2019. Hogan’soperating cycle is less than one year.Required:1. a. Using the net method, how should Hogan account for the sales discounts at the date of sale? What is therationale for the amount recorded as sales under the net method?b. Using the net method, what is the effect on Hogan’s sales revenues and net income when customers do nottake the sales discounts?2. What is the effect of trade discounts on sales revenues and accounts receivable? Why?3. How should Hogan account for the accounts receivable factored on August 1, 2018? Why?4. How should…On August 1, 2022, Colombo Company’s treasurer signed a note promising to pay $122,700 on December 31, 2022. The proceeds of the note were $116,100. Use the horizontal model to show the effects of recording interest expense for the month of September. Indicate the financial statement effect. What is the discount on notes payable and what is the interest expense?
- Cheyenne Corp. has the following transactions related to notes receivable during the last 2 months of 2020. The company does not make entries to accrue interest except at December 31. Loaned $13,800 cash to Manny Lopez on a 12 month, 10% note. Nov. 1 Sold goods to Ralph Kremer, Inc., receiving a $27,000, 90-day, 8% note. Dec. 11 Received a $21,000, 180 day, 12% note in exchange for Joe Fernetti's outstanding accounts receivable. 16 31 Accrued interest revenue on all notes receivable.On October 1, 2020, Shamrock, Inc. assigns $1,160,700 of its accounts receivable to Bridgeport National Bank as collateral for a $747,900 note. The bank assesses a finance charge of 3% of the receivables assigned and interest on the note of 9%. Prepare the October 1 journal entries for both Shamrock and Bridgeport. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Shamrock, Inc. Oct. 1 Bridgeport National Bank Oct. 1A company sold goods to a customer in exchange for a 5-year, zero-interest-bearing note on January 1, 2021. The note has a face amount of $308,000. The company imputes a 10% interest rate on this zero-interest note transaction. Present value factor for 10% and 5 years, single sum is 0.62. In the journal entry made on 12/31/2022, the company will record Discount on Notes Receivable by $__________. (Please do not use your own present value tables or financial calculator.) (Please do not round your answer in any part of the computation.) (DO NOT put a plus or minus sign in front of the amount.)
- Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate. Required: a. Compute the proceeds. Assume a 360-day year. b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75 of bank protest fees. If an amount box does not require an entry, leave it blank.On December 1, 2017, Marin, Inc. assigns $ 3,380,000 of its accounts receivable to Sweet Acacia Bank as collateral for a $ 2,028,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 8%. Prepare the December 1 journal entries for both Marin and Sweet Acacia. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Marin, Inc. December 1 Sweet Acacia Bank December 1Non-Interest-Bearing Notes Payable On October 1, 2017, Valentino Company borrowed $18,800 from U.S. Best Bank by issuing a 12-month note. The bank discounted the note at 9%. Identify and analyze the effect of the payment of the note on October 1, 2018. How does this entry affect the accounting equation?If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Round your answers to the nearest dollar.
- Presley Supply Co. has the following transaction related to notes receivable during the last 2 months of 2020. Nov. 1 Loaned $30,000 cash to Logan Ransey on a 1-year, 10% note. Dec. 11 Sold goods to be Joe Noland, Inc., receiving a $9,000, 90-day, 8% note. 16 Received a $4,000, 6-month, 9% note in exchange for Jane Brock's outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable. (a) Your Answer Correct Answer (Used) Your answer is partially correct. Journalize the above transactions for Presley Supply Co. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round interest to the nearest dollar.) (b) Date Account Titles and Explanation Nov. 1 Notes Receivable Cash Dec. 11 Notes Receivable Sales Revenue 16 Notes Receivable Accounts Receivable 31 Interest Receivable Interest Revenue eTextbook and Media Solution List of Accounts Debit 30000 9000 4000 667 Credit 30000 9000 4000 667 Attempts: 3 of 3 used Record the…Ayayai Supply Co. has the following transactions related to notes receivable during the last 2 months of 2020. The company does not make entries to accrue interest except at December 31. Nov. 1 Loaned $ 18,000 cash to Manny Lopez on a 12-month, 8% note. Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $ 36,000, 90-day, 6% note. 16 Received a $ 21,600, 180 day, 12% note in exchange for Joe Fernetti’s outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable. (a) Journalize the transactions for Ayayai Supply Co. (Ignore entries for cost of goods sold.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Use 360 days for calculation. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 8%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 10%. Required: Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.). Tab 1) Record the accrued interest earned. Tab 2) Record the discounting of note receivable. Date General Journal Debit Credit February 28, 2021 ____________________________ ___________ ____________ _____________________________ ____________ ____________…