The following selected transactions relate to liabilities of Fairfox Inc., for portions of 2021. Fairfox's fiscal year ends on December 31. 2021 a) April 1 Arranged a short-term line of credit with Belize Bank amounting to $20,000,000 at the bank's prime rate of 12%. The company will pay no commitment fees for this arrangement. b) July5 Received a $75,000 refundable deposit from a major customer for mailing containers used to transport the company's equipment. c) Oct. 17 Received most of the mailing containers covered by the refundable deposit and a letter stating that the customer will retain containers represented by $12,000 of the deposit and therefore does not request a refund for that amount. The cost of the forfeited containers was $4,500. d) Aug. 1 Borrowed $7 million cash from Belize Bank under the line of credit arranged in March and issued a ten-month promissory note. Interest at the prime rate of 12% was payable at maturity. for the liabilities described above

The following selected transactions relate to liabilities of Fairfox Inc., for portions of 2021. Fairfox's fiscal year ends on December 31. 2021 a) April 1 Arranged a short-term line of credit with Belize Bank amounting to $20,000,000 at the bank's prime rate of 12%. The company will pay no commitment fees for this arrangement. b) July5 Received a $75,000 refundable deposit from a major customer for mailing containers used to transport the company's equipment. c) Oct. 17 Received most of the mailing containers covered by the refundable deposit and a letter stating that the customer will retain containers represented by $12,000 of the deposit and therefore does not request a refund for that amount. The cost of the forfeited containers was $4,500. d) Aug. 1 Borrowed $7 million cash from Belize Bank under the line of credit arranged in March and issued a ten-month promissory note. Interest at the prime rate of 12% was payable at maturity. for the liabilities described above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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