The January 1, Year 1 trial balance for the Collins Company is found on the trial balance tab. The beginning balances are assumed. Collins Company entered into the following transactions involving short-term liabilities. Note: Use 360 days a year. Year 1 April 20 Purchased $52,250 of merchandise on credit from Lewis, terms n/30. May 19 Replaced the April 20 account payable to Lewis with a 90-day, 12%, $39,000 note payable along with paying $13,250 in cash. July 8 Borrowed $117,000 cash from NYR Bank by signing a 120-day, 9%, $117,000 note payable. August 17 Paid the amount due on the note to Lewis at the maturity date. November 5 Paid the amount due on the note to NYR Bank at the maturity date. November 28 Borrowed $75,000 cash from Fargo Bank by signing a 60-day, 8%, $75,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 January 27 Paid the amount due on the note to Fargo Bank at the maturity date. Requirement General Journal General Ledger Trial Balance Schedule of Calculation of Payables Interest Year 2 payment Enter the principal amount, interest rate, and number of days of interest to be recorded for each note. Verify that interest expense agrees with your journal entries and the trial balance. Collins Company August 17- Lewis note: Calculation of interest expense Principal Interest rate Number of days' interest to be recorded in Year 1 Total interest expense - Year 1 $ 0
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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