Question:On April 1, 2024, Oakland Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules,which is hurting Oakland's business. The supplier explains that it has a temporary lack of funds that is slowing itsproduction cycle. Oakland agrees to lend $540,000 to its supplier using a 12-month, 11% note.Required:Record the following transactions for Oakland Corporation:1. The loan of $540,000 and acceptance of the note receivable on April 1, 2024.2. The adjusting entry for accrued interest on December 31, 2024.3. Cash collection of the note and interest on April 1, 2025.

Journal entries are those which are recorded for every transaction which takes place during the…

Answered: Question: On April 1, 2024, Oakland…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 21P

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(b) On April 1, 2025, Marigold Company assigns $505,300 of its accounts receivable to the Third National Bank as collateral for a $327,200 loan due July 1, 2025. The assignment agreement calls for Marigold to continue to collect the receivables. Third National Bank assesses a finance charge of 4% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). (a) Your answer is correct. Prepare the April 1, 2025, journal entry for Marigold Company. (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. List all debit entries before credit entries.) Date Account Titles and Explanation Apr. 1, Cash 2025 Interest Expense Notes Payable eTextbook and Media List of Accounts Debit 306988 20212 Credit 327200 Attempts: 1 of 2 used Prepare the journal entry for Marigold's collection of $378,200 of the…
On January 1, 2025, Sage Furniture borrowed $5,900,000 (face value) from Sinise Co., a major customer, through a zero-interest-bearing note due in 4 years. Because the note was zero-interest-bearing, Sage Furniture agreed to sell furniture to this customer at lower than market price. A 9% rate of interest is normally charged on this type of loan. a - Prepare the journal entry to record this transaction. b - Determine the amount of interest expense to report for 2025.
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On January 1, 2024. Byner Company purchased a used tractor. Byner paid 55,000 down and signed a naninterest bearing note requiring 542, 000 to be paid on December 31, 2026 The fair value of the tractor is not determinable. An interest rate of 11% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December Note: Use tables, Excel, or a financial calculator. (FV of 51, PV of $1. FVA of S1, PVA of $1, FVAD of St and PVAD of $1) Required: Prepare the journal entry to record the acquisition of the tractor. How much interest expense will the company include in its 2024 and 2025 income statements for this note? What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?
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Question. Jamaica Corporation carried out the following transactions involving note payable. During the fiscal year ended December 31, 2020. Aug 6 Borrowed $ 15,200 from Tony Stark, issuing to him a 45 da, 14% note payable. Sept. 16 Purchased office equipment from Ikea Company. The invoice amount was $18,800 and Ikea Company agreed to accept as full payment a 3-month, 15% note for the invoice amount. Sept. 20 Paid Tony Stark note plus accrued interest. Nov.1 Borrowed $ 2,35,000 from Nation Commercial Bank at an interest rate of 12% per annum; signed a 90-days note payable for $ 2,42,256, which included a $7,056 interest charge in the face amount. Dec.1 Purchased merchandise in the amount of $13,000 from Stephens & Co. Gave in settlement a 60-day note nearing interest at 15% (Perpetual inventory system is deployed). Dec. 16 The $18,800 note payable to Ikea Company matured today. Paid the interest accrued and issued new 30-days, 12% note to replace the maturing…
On August 1, 2022, Colombo Company's treasurer signed a note promising to pay $120,900 on December 31, 2022. The proceeds of the note were $116,400. Required: a. Calculate the discount rate used by the lender.
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