The following are selected 2025 transactions of ayayai corporation: september 1 purchased inventory from ripken company on account for $125,000. ayayai records purchases gross and uses a periodic inventory system. october 1 issued a $125,000, 12 - month, 12% note to ripken in payment of account. october 1 borrowed $125,000 from the shore bank by signing a 12 - month,zero - interest - bearing $145, 000 note. prepare adjusting entries at december 31. (use straight - line amortization of the discount.)

The following are selected 2025 transactions of ayayai corporation: september 1 purchased inventory from ripken company on account for $125,000. ayayai records purchases gross and uses a periodic inventory system. october 1 issued a $125,000, 12 - month, 12% note to ripken in payment of account. october 1 borrowed $125,000 from the shore bank by signing a 12 - month,zero - interest - bearing $145, 000 note. prepare adjusting entries at december 31. (use straight - line amortization of the discount.)

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 14RE: On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank....

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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.
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.
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.
Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)
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The following are selected 2023 transactions of Whispering Winds Corporation. Purchased inventory from Flint Ltd. on account for $42,800. Whispering Winds uses a periodic inventory system. Issued a $42,800, 12-month, 8% note to Flint in payment of Whispering Winds's account. Borrowed $75,300 from the bank by signing a 12-month, non-interest-bearing $80,300 note. Prepare the journal entries for the payment of the notes at maturity, assuming the Whispering Winds uses reversing entries. (Show the reversing entries at January 1, 2024.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Sept. 1 Oct. 1 1 Date Oct. 1 v Oct. 1 Oct. 1 Jan, 1 Oct. 1 V Account Titles and Explanation Flint Note Purchases Accounts Payable Cash Interest Expense Notes…
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The following are selected 2020 transactions of Astin Corporation. Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system. Oct. 1 Issued a $50,000, 12-month, 8% note to Encino in payment of account. Oct. 1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note. Instructions a. Prepare journal entries for the selected transactions above. b. Prepare adjusting entries at December 31. c. Compute the total net liability to be reported on the December 31 balance sheet for: 1. The interest-bearing note. 2. The zero-interest-bearing note.