Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 5, Problem 5.15E
To determine
Notes receivable:
Note receivable refers to a written promise for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to lender or creditor. Notes receivable is an asset of a business.
To record: The acceptance of the note receivable on March 1 and the cash collection on September 1for Company T&A.
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On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some recent food poisoning complaints. Legal services total $11,000. In payment for the services, Whole Grain Bakery signs a 9% note requiring the payment of the face amount and interest to Terrell & Associates on September 1. Required: For Terrell & Associates, record the acceptance of the note receivable on March 1 and the cash collection on September 1.
n March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some recent food poisoning complaints. Legal services total $11,000. In payment for the services, Whole Grain Bakery signs a 9% note requiring the payment of the face amount and interest to Terrell & Associates on September 1.
Required:
For Terrell & Associates, record the acceptance of the note receivable on March 1 and the cash collection on September 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2018. The note, along withinterest at 10%, is due on July 1, 2018. On February 28, 2018, Selkirk discounted the note at Unionville Bank. Thebank’s discount rate is 12%.Required:Prepare the journal entries required on February 28, 2018, to accrue interest and to record the discounting (roundall calculations to the nearest dollar) for Selkirk. Assume that the discounting is accounted for as a sale.
Chapter 5 Solutions
Financial Accounting
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