Following is a list of transactions entered into during the first month of operations of Gardener
Corporation, a new landscape service. Prepare in journal form the entry to record each transaction.
April 1: Articles of incorporation are filed with the state, and 100,000 shares of common stock are issued for $100,000 in cash.
April 4: A six-month promissory note is signed at the bank. Interest at 9% per annum will be repaid in six months along with the principal amount of the loan of $50,000.
April 8: Land and a storage shed are acquired for a lump sum of $80,000. On the basis of an appraisal, 25% of the value is assigned to the land and the remainder to the building.
April 10: Mowing equipment is purchased from a supplier at a total cost of $25,000. A down payment of $10,000 is made, with the remainder due by the end of the month.
April 18: Customers are billed for services provided during the first half of the month. The total amount billed of $5,500 is due within ten days.
April 27: The remaining balance due on the mowing equipment is paid to the supplier.
April 28: The total amount of $5,500 due from customers is received.
April 30: Customers are billed for services provided during the second half of the month. The total amount billed is $9,850.
April 30: Salaries and wages of $4,650 for the month of April are paid.
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Chapter 3 Solutions
Financial Accounting: The Impact on Decision Makers
- 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.arrow_forwardOn December 1, Williams Company borrowed $45,000 cash from Second National Bank by signing a 90-day, 9% note payable. a. Prepare Williams' journal entry to record the issuance of the note payable. b. Prepare Williams' journal entry to record the accrued interest due at December 31. c. Prepare Williams' journal entry to record the payment of the note on March 1 of the next year.arrow_forwardThe following selected transactions relate to liabilities of Rocky Mountain Adventures. Rocky Mountain's fiscal year ends on December 31. January 13 Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the banks prime rate. February 1 Arrange a three-month bank loan of $4.1 million with First Bank under the line of credit agreement. Interest at the prime rate of 8% is payable at maturity. May 1 Pay the 8% note at maturity. Required: Record the appropriate entries, if any, on January 13, February 1, and May 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).) Journal entry worksheet 1 2 Record the receipt of revolving credit. Note: Enter debits before credits. Date General Journal Debit Credit January 13 Record entry Clear…arrow_forward
- The following selected transactions relate to liabilities of Rocky Mountain Adventures. Rocky Mountain’s fiscal year ends on December 31.January 13 Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the banks prime rate.February 1 Arrange a three-month bank loan of $5 million with First Bank under the line of credit agreement. Interest at the prime rate of 7% is payable at maturity. May 1 Pay the 7% note at maturity.Required:Record the appropriate entries, if any, on January 13, February 1, and May 1.arrow_forwardIn the month of January beginning Peter company borrowed $ 5000 from Lios by issuing 10 % Note, Prepare the entry for the Amount borrowed.arrow_forwardThis is all the information I was given for the assignment. I'm expected to complete journal entries based on this. Please help however you can.arrow_forward
- The following selected transactions relate to liabilities of Colorado Adventures. Colorado's fiscal year ends on December 31. January 13 Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the bank's prime rate. February 1 Arrange a three-month bank loan of $3.8 million with First Bank under the line of credit agreement. Interest at the prime rate of 7% is payable at maturity. May 1 Pay the 7% note at maturity. Required: Record the appropriate entries, if any, on January 13, February 1, and May 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 million should be entered as 5,000,000).)arrow_forwardOn the first day of the fiscal year, Shiller Company borrowed $26,000 by giving a three-year, 12% installment note to Soros Bank. The note requires annual payments of $10,952, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $3,120 and principal repayment of $7,832. Journalize the entries to record the following: a1. Issued the installment note for cash on the first day of the fiscal year. If an amount box does not require an entry, leave it blank. a2. Paid the first annual payment on the note. If an amount box does not require an entry, leave it blank. b. How would the notes payable be reported on the balance sheet at the end of the fiscal year?arrow_forwardOn October 1, Eder Fabrication borrowed $84 million and issued a nine-month, 15% promissory note. Interest was payable at maturity. Prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the note at December reporting period.arrow_forward
- On October 1, Dutta Incorporated borrowed $94 million and issued a nine-month promissory note. Interest was discounted at issuance at a 12% discount rate. Prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the note at December 31, the end of the reporting period.arrow_forwardOn the first day of the fiscal year, Shiller Company borrowed $85,000 by giving a seven-year, 7% installment note to Soros Bank. The note requires annual payments of $15,772, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $5,950 and principal repayment of $9,822. a. Journalize the entries to record the following: 1. Issued the installment note for cash on the first day of the fiscal year. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - 2. Paid the first annual payment on the note. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - - Select - - Select - b. Explain how the notes payable would be reported on the balance sheet at the end of the first year. Notes payable are reported as liabilities on the balance sheet. The portion of the note…arrow_forwardOn the first day of the fiscal year, Shiller Company borrowed $85,000 by giving a seven-year, 7% installment note to Soros Bank. The note requires annual payments of $15,772, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $5,950 and principal repayment of $9,822. a. Journalize the entries to record the following: 1. Issued the installment note for cash on the first day of the fiscal year. If an amount box does not require an entry, leave it blank. 2. Paid the first annual payment on the note. If an amount box does not require an entry, leave it blank. b. Explain how the notes payable would be reported on the balance sheet at the end of the first year. Notes payable are reported as liabilities on the balance sheet. The portion of the note payable that is due within____ is reported as a_____. The remaining portion of the note payable that is not due within one year is reported as a(n)_____. .arrow_forward
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning