The following information pertains to Sunland Ltd. In 2024 the company entered into new borrowings using short-term notes payable. On June 30, they borrowed $10,900 that they planned to use to purchase new office equipment, the interest rate on the note was 6% with both interest and principal repayable in 6 months (December 31st). On October 1st, the company financed the purchase of a used vehicle costing $65,400 using a 12 month note payable at 8% with interest payments due quarterly and the principal amount due at maturity. The company's year end is December 31st. Record the journal entries for the issuance of both notes and any interest entries that need to be made up to and including December 31, 2024. Assume that no interest expense was accrued during the year. (Record journal entries in the order presented in the problem. 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. List all debit entries before credit entries.) Date Account Titles and Explanation (To record interest and principal repayable amount) (To record accrual of interest) Debit Credit

The following information pertains to Sunland Ltd. In 2024 the company entered into new borrowings using short-term notes payable. On June 30, they borrowed $10,900 that they planned to use to purchase new office equipment, the interest rate on the note was 6% with both interest and principal repayable in 6 months (December 31st). On October 1st, the company financed the purchase of a used vehicle costing $65,400 using a 12 month note payable at 8% with interest payments due quarterly and the principal amount due at maturity. The company's year end is December 31st. Record the journal entries for the issuance of both notes and any interest entries that need to be made up to and including December 31, 2024. Assume that no interest expense was accrued during the year. (Record journal entries in the order presented in the problem. 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. List all debit entries before credit entries.) Date Account Titles and Explanation (To record interest and principal repayable amount) (To record accrual of interest) Debit Credit

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

See similar textbooks

Related questions

Q: Precision Castparts, a manufacturer of processed engine parts in the automotive and airline…

A: Interest expense is the cost of borrowing the funds while interest revenue is the income earned for…

Q: The following selected transactions relate to liabilities of United Insulation Corporation. United’s…

A: Solution:- Preparation of appropriate journal entries through the maturity of each liability as…

Q: On January 1, 2021, Nantucket Ferry borrowed $14,000,000 cash from BankOne and issued a four-year,…

A: Borrowings refers to a financial transaction wherein a borrower (any person or company) approaches a…

Q: The following selected transactions relate to liabilities of United Insulation Corporation. United’s…

A: Journal entries indicate the format that records the day to day business related to monitory…

Q: On December 31, 2020, Vaughn Manufacturing has $6030000 of short-term notes payable due on February…

A: Short term liabilities or current liabilities are those liabilities which needs to be settled or…

Q: Required information (The following information applies to the questions displayed below.] On…

A: The income statement shows the items of income and expenditure and resulting profits or losses. The…

Q: Cullumber Company borrowed $313,000 on January 1, 2022, by issuing a $313,000, 10% mortgage note…

A: Notes payable is a written promissory agreement, wherein a borrower borrows a certain amount of…

Q: he following selected transactions relate to liabilities of United Insulation Corporation. United's…

A: A journal is a chronological record of accounting transaction showing the names of the accounts that…

Q: On December 1, 2022, Old Car Co. borrowed money at the bank by signing a 90-day non-interest-bearing…

A: The objective of the question is to determine the correct accounting entry for a…

Q: Question. Jamaica Corporation carried out the following transactions involving note payable. During…

A: The journal entries are prepared to record the non-economic and economic transactions of the…

Q: On January 1, 2021, Strato Corporation borrowed $2 million from a local bank to construct a new…

A: Loan is contract between lender and borrower where lender provide funds to borrower for definite…

Question

The following information pertains to Sunland Ltd. In 2024 the company entered into new borrowings using short-term notes payable.
On June 30, they borrowed $10,900 that they planned to use to purchase new office equipment, the interest rate on the note was 6%
with both interest and principal repayable in 6 months (December 31st). On October 1st, the company financed the purchase of a used
vehicle costing $65,400 using a 12 month note payable at 8% with interest payments due quarterly and the principal amount due at
maturity. The company's year end is December 31st.
Record the journal entries for the issuance of both notes and any interest entries that need to be made up to and including December
31, 2024. Assume that no interest expense was accrued during the year. (Record journal entries in the order presented in the problem.
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. List all debit entries before credit entries.)
Date
Account Titles and Explanation
(To record interest and principal
repayable amount)
(To record accrual of interest)
Debit
Credit

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Defining accrual basis of accounting

VIEW

Step 2: Recording journal entries

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
Pickles R Us is a pickle farm located in the Northeast. The following transactions take place: A. On November 6, Pickles borrows $820,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in six months from November 6, and annual interest rate of 3%. B. On December 12, Pickles borrows an additional $200,000 with payment due in three months from December 12, and an annual interest rate of 10%. C. Pickles pays its accounts in full on March 12, for the December 12 loan, and on May 6 for the November 6 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Pickles.
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed 2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, 2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, 3 million note payable and a 10%, 10-year, 1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1. RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows: Calculate Dexters weighted average accumulated expenditures.
On June 1, 2025, Thomas Company borrowed $42,000 from a bank on a 7%, 8-month note payable. On August 1, 2026, Thomas Company borrowed $63,000 from a bank on a 16%, 9-month note payable. Calculate the total amount of interest expense related to these two loans that Thomas Company would report in its 2026 income statement.
On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $42,000 face value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $12,121 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $22,260 cash per year. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the four years.
On October 1, 2023, Parton Industries borrowed $12 million cash to provide working capital. The loan was made by Second Bank under a short-term line of credit. Parton issued an 8-month, “noninterest-bearing note.” 8% is the bank’s stated “discount rate.” Parton’s fiscal period is the calendar year. In Parton’s 2023 income statement interest expense for the note will be:
A bank loan of $800,000 was obtained byPWP Ltd on 1 August 2020 to purchase itsbusiness office, warehouse and factory andan upfront establishment fee of $8,000 waspaid on that date. The period of the loan waseight years and the bank charged interest atthe rate of 10 percent. 1.Explain what deductions are available to PWP for2020/21 in relation to the establishment fee andinterest paid on the bank loan. 2.What deductions would be available if PWP repaidthe $500,000 loan in full-on 30 June 2022?
Gadubhai
[The following information applies to the questions displayed below.] On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $52,000 cash per year. b. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles / Retained Earnings, leave the cell blank.) BROWN CO. Effect of Events on the Accounting Equation 2018, 2019, 2020 and 2021 Stockholders Equity Retained Earnings Assets = Liabilities Accounts Titles / Event Retained Earnings Notes Payable Cash Land 2018 1/1 1/1 %3D 12/31 12/31 Bal. 2019 Beg.…
On June 30, 2021, the High Five Surfboard Company had outstanding accounts receivable of $600,000. On July 1, 2021, the company borrowed $450,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The company assigned specific receivables totaling $600,000 as collateral for the loan. Equitable Finance charges a finance fee equal to 1.8% of the accounts receivable assigned.Required:Prepare the journal entry to record the borrowing on the books of High Five Surfboard.
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.