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Proco had an account payable of $63,000 due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and greed to sign a note payable for the amount due. The note was dated February 1, had an interest rate of 9% per annum, and was sayable with interest on May 31. Required: . Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. . Prepare the journal entries to show each of these transactions and adjustments. Complete this question by entering your answers in the tabs below. Required A Required B Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. Transaction or Adjustment Assets = Balance Sheet Category Liabilities Accounts payable-63.000 OT Answer is not complete. Stockholders' Equity Net Income Effect Income Statement Revenues Expenses Interest expense +945

Proco had an account payable of $63,000 due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and greed to sign a note payable for the amount due. The note was dated February 1, had an interest rate of 9% per annum, and was sayable with interest on May 31. Required: . Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. . Prepare the journal entries to show each of these transactions and adjustments. Complete this question by entering your answers in the tabs below. Required A Required B Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. Transaction or Adjustment Assets = Balance Sheet Category Liabilities Accounts payable-63.000 OT Answer is not complete. Stockholders' Equity Net Income Effect Income Statement Revenues Expenses Interest expense +945

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 26Q: A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer...
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Proco had an account payable of $63,000 due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and agreed to sign a note payable for the amount due. The note was dated February 1, had an interest rate of 9% per annum, and was payable with interest on May 31. Required: a. Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. b. Prepare the journal entries to show each of these transactions and adjustments. Complete this question by entering your answers in the tabs below. Required A Required B Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. Transaction or Adjustment a. a. b. C. C. Assets Cash-64,890 ✔ = Balance Sheet Category Liabilities Accounts payable -63,000 Note payable +63,000 Interest payable +945 Note payable -63,000 Interest payable-945 ✔ ✓ ✓ ✔ X Answer is not complete. + Stockholders' Equity < Required A Net Income Effect Required B > = Income Statement Revenues Expenses Interest expense +945 Interest expense +945 X Show less
Transcribed Image Text:Proco had an account payable of $63,000 due to Shirmoo Incorporated, one of its suppliers. The amount was due to be paid on January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco's treasurer called Shirmoo's treasurer and agreed to sign a note payable for the amount due. The note was dated February 1, had an interest rate of 9% per annum, and was payable with interest on May 31. Required: a. Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. b. Prepare the journal entries to show each of these transactions and adjustments. Complete this question by entering your answers in the tabs below. Required A Required B Use the horizontal model to show the effects (+ for addition and for subtraction) of each of these transactions and adjustments for Proco on the following: a. February 1, to show that the account payable had been changed to a note payable. b. March 31, to accrue interest expense for February and March. c. May 31, to record payment of the note and all of the interest due to Shirmoo. Transaction or Adjustment a. a. b. C. C. Assets Cash-64,890 ✔ = Balance Sheet Category Liabilities Accounts payable -63,000 Note payable +63,000 Interest payable +945 Note payable -63,000 Interest payable-945 ✔ ✓ ✓ ✔ X Answer is not complete. + Stockholders' Equity < Required A Net Income Effect Required B > = Income Statement Revenues Expenses Interest expense +945 Interest expense +945 X Show less
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