Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 8, Problem 8.37Q
To determine
The entry to record the debit payment.
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Luna Company accepted credit cards in payment for $7,100 of services performed during July Year 1. The credit card company charged
Luna a 1.50 percent service fee; it paid Luna as soon as it received the invoices.
Required
a. Prepare the general journal entry to record the service revenue.
b. Prepare the general journal entry for the collection of the receivable from the credit card company.
c. Based on this information alone, what is the amount of net income earned during the month of July?
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
Prepare the general journal entry to record the service revenue. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field. Round your answers to nearest whole dollar.)
View transaction list
Journal entry worksheet
<
A
Record service revenue on credit card payment and credit card expenses.
Note: Enter debits before credits.
Transaction
1
General…
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On 9/1, the Knight's Stop issues a new part to a customer to replace a defective part the customer purchased
the previous year. The new part was issued under the two-year warranty offered on all parts sold by company.
On 9/1, Knight's Stop would debit which account for the journal entry?
O Accounts Receivable
O Inventory
O Warranty Payable
O Accounts Payable
O Warranty Expense
O. Cash
O Current Portion Long-term Debt
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Chapter 8 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 8 - All of the following are reported as current...Ch. 8 - Prob. 2QCCh. 8 - Prob. 3QCCh. 8 - What is accounts payable turnover? a.Purchases on...Ch. 8 - Prob. 5QCCh. 8 - Nicholas Corporation accrues the interest expense...Ch. 8 - Phoebe Corporation signed a six-month note payable...Ch. 8 - Prob. 8QCCh. 8 - Backpack Co. was organized to sell a single...Ch. 8 - Prob. 10QC
Ch. 8 - Potential liabilities that depend on future events...Ch. 8 - A contingent liability should be recorded in the...Ch. 8 - Prob. 8.1ECCh. 8 - Prob. 8.1SCh. 8 - Prob. 8.2SCh. 8 - Prob. 8.3SCh. 8 - Prob. 8.4SCh. 8 - (Learning Objective 3: Account for a short-term...Ch. 8 - Prob. 8.6SCh. 8 - (Learning Objective 4: Report warranties in the...Ch. 8 - (Learning Objective 4: Account for accrued...Ch. 8 - (Learning Objective 5: Interpret a companys...Ch. 8 - Prob. 8.10AECh. 8 - Prob. 8.11AECh. 8 - LO 3 (Learning Objective 3: Purchase inventory,...Ch. 8 - (Learning Objective 3: Record note payable...Ch. 8 - (Learning Objective 3: Account for a short-term...Ch. 8 - Prob. 8.15AECh. 8 - Prob. 8.16AECh. 8 - Prob. 8.17AECh. 8 - Prob. 8.18AECh. 8 - Prob. 8.19AECh. 8 - Prob. 8.20BECh. 8 - Prob. 8.21BECh. 8 - LO 3 (Learning Objective 3: Purchase inventory,...Ch. 8 - Prob. 8.23BECh. 8 - Prob. 8.24BECh. 8 - Prob. 8.25BECh. 8 - Prob. 8.26BECh. 8 - Prob. 8.27BECh. 8 - (Learning Objectives 1, 2, 3, 4: Report current...Ch. 8 - Prob. 8.29BECh. 8 - Prob. 8.30QCh. 8 - For the purpose of classifying liabilities as...Ch. 8 - Prob. 8.32QCh. 8 - Prob. 8.33QCh. 8 - Prob. 8.34QCh. 8 - Prob. 8.35QCh. 8 - Prob. 8.36QCh. 8 - Prob. 8.37QCh. 8 - Prob. 8.38QCh. 8 - Prob. 8.39QCh. 8 - Prob. 8.40QCh. 8 - Prob. 8.41QCh. 8 - Prob. 8.42QCh. 8 - Prob. 8.43QCh. 8 - Group A LO 1, 2, 3, 4 (Learning Objective 1, 2, 3,...Ch. 8 - Prob. 8.45APCh. 8 - LO 1, 2, 3, 4 (Learning Objectives 1, 2, 3, 4:...Ch. 8 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 8 - Group B LO 1, 2, 3, 4 (Learning Objectives 1, 2,...Ch. 8 - Prob. 8.49BPCh. 8 - Prob. 8.50BPCh. 8 - Prob. 8.51BPCh. 8 - Prob. 8.52CEPCh. 8 - Prob. 8.53SCCh. 8 - Prob. 8.54DCCh. 8 - Prob. 8.55DCCh. 8 - Prob. 8.56EICCh. 8 - Prob. 1FFCh. 8 - Prob. 1GP
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- On 9/1, the Knight's Stop issues a new part to a customer to replace a defective part the customer purchased the previous year. The new part was issued under the two-year warranty offered on all parts sold by company. On 9/1, Knight's Stop would debit which account for the journal entry? O Accounts Receivable O Inventory O Warranty Payable O Accounts Payable O Warranty Expense O Cash O Current Portion Long-term Debt ASUS f4 f5 E3 f6 f7 f8 f9 f11 f10 团 & 4 5 6 7 8. Y. U 因 图 %24arrow_forwardPrefix Supply Company received a 120-day, 8% note for $450,000, dated April 9 from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume a 360-day year. C. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.arrow_forwardPrefix Supply Company received a 60-day, 5% note for $57,000 dated July 12 from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume a 360-day year. c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles. a. Determine the due date of the note. September 10 b. Determine the maturity value of the note. Assume a 360-day year. (Note: Round computations to the nearest whole dollar.) c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.arrow_forward
- Record these transactions in general journal ledger: Dec 1: Purchased equipment costing $15,608 by taking out a 4-month installment note with First Bank. Dec 4: Accepted a sales return from Eastern for an item having an original gross sales price of $6,000. The original sale to Eastern occurred in November with terms 2/15, n/30. Dec 5: Specifically wrote off the receivable balance owed by Baker as uncollectible. Dec 7: Returned defective inventory with a gross cost of $4,000 back to Hunt Corp. Dec 14: Wilson returned an item originally purchased on Dec 12 with a gross sales price of $7,000. Dec 14: Returned inventory with a gross cost of $2,000 back to Nelson Industries. Dec 18: Bought office supplies on account for $9,000 from Staples Inc. (open a new Accounts Payable in the subsidiary ledger--Vendor # 210-30). Invoice # is OM1218. Staples Inc.’s terms are n/30 Dec 19: Received the December utilities bill for the amount of $15,000. The bill will be paid in January of next year.…arrow_forwardDuring the month, Inline Industries paid $582 to settle warranty claims. Inline uses an estimated warranty account. The journal entry to record the payment would have been: A. debit Warranty expense, $582; credit Cash, $582. B. debit Warranty expense, $582; credit Estimated Warranty payable, $582 C. debit Estimated warranty payable, $582; credit Warranty expense, $582 D. debit Estimated warranty payable, $582, credit Cash, $582arrow_forwardWhich of the following summaries the effect of the payment of cash to settle the warranty claim in year 2 on the elements of the financial statementsarrow_forward
- During Year 1, a company accepts the following notes receivable. 1. On April 1, the company provides services to a customer on account. The customer signs a four-month, 9% note for $5,100. 2. On June 1, the company lends cash to one of the company's vendors by accepting a six-month, 10% note for $9,100. 3. On November 1, the company accepts payment for prior services by having a customer with a past-due account receivable sign a three-month, 8% note for $4,100. Required: Record the acceptance of each of the notes receivable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 On April 1, the company provides services to a customer on account. The customer signs a four-month, 9% note for $5,100. Note: Enter debits before credits. Date General Journal Debit Credit April 01 Record entry Clear entry View general journalarrow_forwardLundquist Company received a 60-day, 9% note for $28,000, dated July 23, from a customer on account.a. Determine the due date of the note.b. Determine the maturity value of the note.c. Journalize the entry to record the receipt of the payment of the note at maturity.arrow_forwardPrefix Supply Company received a 60-day, 4% note for $46,000 dated July 12 from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume a 360-day year. c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Prefix Supply Company General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 129 Allowance for Doubtful Accounts 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY…arrow_forward
- Anne Taylor Company borrowed cash on August 1 of Year 1, by signing a $19,980 (face amount), one-year note payable, due on July 31 of Year 2. The accounting period of Anne Taylor ends December 31. Assume an effective interest rate of 11%. a. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is an interest-bearing note? $ 0 b. Provide the following entries and reporting amounts: 1. August 1 of Year 1, date of the loan. 2. December 31 of Year 1, adjusting entry. 3. July 31 of Year 2, payment of the note. ⚫Note: Round your answers to the nearest whole dollar. Date 1. Aug. 1, Year 1 Account Name Dr. Cr. 0 0 0 0 To record issue of note. 2. Dec. 31, Year 1 0 0 To record year-end adjusting entry. 3. July 31, Year 2 0 O O 0 0 0 0 0 0 0 00 0 0 To record payment of note. c. What liability amounts should be shown on the December 31 of Year 1 balance sheet? Balance Sheet, Dec. 31 Year 1 Current liabilities Note Payable 0 $ 0 d. Answer (a) and…arrow_forwardLundquist Company received a 60-day, 7% note for $79,000, dated July 23, from a customer on account. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. Assume 360 days in a year. c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.arrow_forwardThe accounts receivable balance on the records of of P38,000 were written off during the year as uncollectible. eud was P283,000. In going over the records, you found accounts reccivable REQUIRED: How much cash was received from the sale of the machine? during the year ended December 31, 2020. The accounts receivable at year- REQUIRED: How much cash was collected on credit sales during the year. Luneta Company of January 1, 2020. Credit sales were recorded at P1,060.000 P245,000 on durine p283.000. In going over the records, you found accounts reccivable PEOUIRED: How much cash was collected on credit sales during the year 2020 ? The manager of the Pansol Company is planning for the qaurter ending Narch 31, 2020, and wants to know how much cash must be paid for merchandise purchases. The inventory of merechandise is to be deereased by P46,000 during the quarter. Sales have been estimated at P360,000. The cost of saies is equal to 30% of sales. Accounts payable is expected to inerease…arrow_forward
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