River Valley Bank agrees to lend Dawson Ltd. $420,000 on January 1. Dawson Ltd. signs a $420,000, 8%, 6-month note. What is the adjusting entry required if Dawson Ltd. prepares financial statements on March 31? a. Dr. Interest Payable, $8,400; Cr. Interest Expense, $8,400. b. Dr. Interest Expense, $16,800; Cr. Interest Payable, $16,800. c. Dr. Interest Expense, $16,800; Cr. Cash, $16,800. d. Dr. Interest Expense, $8,400; Cr. Interest Payable, $8,400.

River Valley Bank agrees to lend Dawson Ltd. $420,000 on January 1. Dawson Ltd. signs a $420,000, 8%, 6-month note. What is the adjusting entry required if Dawson Ltd. prepares financial statements on March 31? a. Dr. Interest Payable, $8,400; Cr. Interest Expense, $8,400. b. Dr. Interest Expense, $16,800; Cr. Interest Payable, $16,800. c. Dr. Interest Expense, $16,800; Cr. Cash, $16,800. d. Dr. Interest Expense, $8,400; Cr. Interest Payable, $8,400.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

See similar textbooks

Similar questions

On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
Everglades Consultants takes out a loan in the amount of $375,000 on April 1. The terms of the loan include a repayment of principal in eight, equal installments, paid annually from the April 1 date. The annual interest rate on the loan is 5%, recognized on December 31. (Round answers to the nearest cent, if needed.) A. Compute the interest recognized as of December 31 in year 1. B. Compute the principal due in year 1.
Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120 in its accounts receivable. Additionally, Karras had a credit balance in its allowance for doubtful accounts of 4,350 and 9,420 at the beginning and end of the year, respectively. During the year, Karras made credit sales of 1,530,000, collected receivables in the amount of 1,445,700, and recorded bad debt expense of 83, 750. Required: Next Level Compute the amount of accounts receivable that Karras wrote off during the year and the amount of accounts receivable at the beginning of the year.
West County Bank agrees to lend Blossom Company $388000 on January 1. Blossom Company signs a $388000, 6%, 6-month note. What is the adjusting entry required if Blossom Company prepares financial statements on March 30? Interest Expense 5820 Interest Payable 5820 Interest Payable 5820 Interest Expense 5820 Interest Expense 11640 Cash 11640 Interest Expense 11640 Interest Payable 11640
Sunland Company borrows $47,600 on July 1 from the bank by signing a $47,600, 13%, one-year note payable. (a) Prepare the journal entry to record the proceeds of the note. (b) Prepare the journal entry to record accrued interest at December 31, assuming adjusting entries are made only at the end of the year.
Royal Bank agrees to lend Backyard Corporation $200,000 on January 1. Backyard signs a $200,000, 4%, 9-month note. Interest is due at maturity on September 30. Backyard's year end is March 31 when they post adjusting entries. What journal entry will Backyard make when paying off the note and interest at maturity? Debit notes payable $200,000, interest expense $4,000 and interest payable $2,000; Credit cash $206,000 Debit notes payable $206,000; Credit cash $206,000 Debit notes payable $200,000 and interest expense $6,000; Credit cash $206,000 Debit notes payable $200,000, interest expense $2,000 and interest payable $4,000; Credit cash $206,000
Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1. Brickyard signs a $200,000, 4%, 9-month note. Interest is due at maturity on September 30. The company's fiscal year ends June 30 and adjusting entries are recorded at that time only. What journal entry will Brickyard make when paying the interest at maturity? Multiple Choice Debit Interest Expense for $6,000 and Cash for $206,000. Debit Interest Payable for $4,000, debit Interest Expense for $2,000, and credit Cash for $6,000. Debit Notes Payable and credit Cash for $206,000. Debit Interest Expense for $4,000, and credit Cash for $4,000.
West County Bank agrees to lend Ivanhoe Company $292000 on January 1. Ivanhoe Company signs a $292000, 6%, 6-month note. What is the adjusting entry required if Ivanhoe Company prepares financial statements on March 30? Interest Expense 8760 Cash 8760 Interest Expense 4380 Interest Payable 4380 Interest Payable 4380 Interest Expense 4380 Interest Expense 8760 Interest Payable 8760
On June 1, Davis Inc. issued an $68,700, 8%, 120-day note payable to Garcia Company Assume that the fiscal year of Garcia ends June 30. Using a 360-day year in your calculations, what is the amount of interest revenue recognized by Garcia in the following year? When required, round your answer to the nearest dollar. a.$916 b.$1,389 c.$5,496 d.$458
Sheridan Company borrows $37,800 on July 1 from the bank by signing a $37,800, 8%, one-year note payable. (a) Prepare the journal entry to record the proceeds of the note.(b) Prepare the journal entry to record accrued interest at December 31, assuming adjusting entries are made only at the end of the year.