Chapter 7, Problem 7.21E

On November 16, 2019, Clear Glass Company borrowed $24,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Company’s effective interest rate?

Prepare adjusting entries as of December 31, 2021 for the following: 1. ACCRUAL: A company issued on November 16, 2021 a 90-day 12% P25,000 note. The note and interest are payable at maturity date. 2. DEFERRAL: A company issued on October 17, 2021 a 180-day 12% P48,000 note. Interest has been paid in advance and was debited to Prepaid Interest.A company issued on October 17, 2021 a 180-day 12% P48,000 note. Interest has been paid in advance and was debited to Prepaid Interest. 3. DEFERRAL: A company received a 10-month 18% P120,000 note dated August 31, 2021. The company collected in advance the full interest due on the note. The amount was credited to Unearned Interest. 4. DEPRECIATION: Alpha Company depreciates its fixed assets at 10% per annum and maintains salvage value at 10% of acquisition cost. On March 1, 2021 it acquired a set of table and chairs for the manager's office for P82,000 cash. On August 16, 2021, it acquired two computers at a purchase price per unit of P70,000.…

On December 1, 2021, a company converted an existing account receivable in the amount of $6,000 to a note receivable to allow an extended payment period. The note is due in three months and includes an annual interest rate of 9%. The company prepares year-end financial statements on December 31 and recorded adjusting entries at that time. What entry should the company make on March 1, 2022, when the interest is paid at maturity? Multiple Choice Debit Cash and credit Notes Receivable for $6,135. Debit Cash for $6,135, credit Notes Receivable for $6,000, and credit Interest Revenue for $135. Debit Cash for $135 and credit Interest Revenue for $135. О Debit Cash for $135, credit Interest Receivable for $45, and credit Interest Revenue for $90.

Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit December 31, 2020

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On December 1, 2020, Shaw Company accepted from Bogner a $10,000, 3-month, 8% note in lieu of an existing $10,000 account receivable.  Shaw Company's fiscal year-end is December 31.  What journal entry, if any, should Shaw Company record on December 31, 2020?

a. On December 31, 2019, the Notes Payable account at Northwood Manufacturing Company had a balance of $13,500. This balance represented a three-month, 10 percent note issued on November 1. Journal entry worksheet   Record the adjustment for interest. Note: Enter debits before credits.         Date General Journal Debit Credit Dec 31, 2019

Kingbird Corporation issued $460,000, 8%, 20-year bonds on January 1, 2022, for $418,008. This price resulted in an effective- interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective-interest method to amortize bond premium or discount. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date Jan. 1, 2022 Account Titles and Explanation Cash Discount on Bonds Payable Bonds Payable Debit 418008 41992 Credit 460000

On December 31, 2019, the Notes Payable account at Vanessa’s Boutique Shop had a balance of $62,800. This amount represented funds borrowed on a six-month, 9 percent note from the firm’s bank on December 1.Record the journal entry for interest expense on this note that should be recorded on the firm’s worksheet for the year ended December 31, 2019. Journal entry worksheet   Record the adjustment for interest. Note: Enter debits before credits.         Date General Journal Debit Credit Dec 31, 2019