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 8.45AP
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3. Journalize the company's payment of the note plus interest on December 31, 2018.
S11-5 Determining current portion of long-term note payable
Learning Objective 1
On January 1, Irving Company purchased equipment of $280,000 with a long-term note
payable. The debt is payable in annual installments of $56,000 due on December 31 of
each year. At the date of purchase, how will Irving Company report the note payable?
o the
Learning Obiective 2.
C11
(Learning Objective 3: Record note payable transactions) Dean Sales Companycompleted the following note payable transactions:2018Jul Purchased delivery truck costing $58,000 by issuing aone-year, 4% note payable.Dec 31 Accrued interest on the note payable.2019Jul 1 Paid the note payable at maturity.1Requirements1. How much interest expense must be accrued at December 31, 2018? (Round your answerto the nearest whole dollar.)2. Determine the amount of Dean Sales’ final payment on July 1, 2019.3. How much interest expense will Dean Sales report for 2018 and for 2019? (If needed,round your answer to the nearest whole dollar.)
(Learning Objective 3: Account for a short-term note payable) Quimby Sports Authority purchased inventory costing $30,000 by signing a 6% short-term, one-year note payable. Thepurchase occurred on July 31, 2018. Quimby pays annual interest each year on July 31. Journalizethe company’s (a) purchase of inventory; (b) accrual of interest expense on April 30, 2019, which isthe company’s fiscal year-end; and (c) payment of the note plus interest on July 31, 2019. (Roundyour answers to the nearest whole number.) (d) Show what the company would report for liabilitieson its balance sheet at April 30, 2019, and on its income statement for the year ended on that date
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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- E4-29 Mattson Loan Company completed these transactions: 2019 Apr. Dec. 2020 Apr. 1 Loaned $20,000 to Charlene Baker on a one-year, 5% note. 31 Accrued interest revenue on the Baker note. 1 Collected the maturity value of the note from Baker (principal plus interest). Show what Mattson would report for these transactions on its 2019 and 2020 balance sheets and income statements. Mattson's accounting year ends on December 31.arrow_forwarddont give answer in image formatarrow_forwardCensider the following note payable transactions of Cargo Video Productions. D(Click the icon to view the transactions.) Requirements 1. Journalize the transactions for the company. Considering the given transactions only, what are Cargo Video Productions' total liabilities on December 31, 2019? 2. X Select explanations on the last line More Info he note requires annual principal pa Credit 2018 Oct. 1 Purchased equipment costing $40,000 by issuing a five-year, 9% note payable. The note requires annual principal payments of $8,000 plus interest each October 1. Dec. 31 Accrued interest on the note payable. 2019 Oct. 1 Paid the first installment on the note. Dec. 31 Accrued interest on the note payable. Print Done 4arrow_forward
- Gravel Corporation borrowed $250,000 from a bank on January 1, 2019, by signing a10%, six-month note. The journal entry made by Gravel on January 1, 2019, will debita. Interest Expense for $25,000 and credit Interest Payable for $25,000.b. Cash for $225,000 and credit Notes Payable for $225,000.c. Interest Expense for $25,000 and credit Cash for $25,000.d. Cash for $250,000 and credit Notes Payable for $250,000.arrow_forward1. Joy’s Bar and Grill completed the following note-payable transactions: 2020 Aug. 1 Purchased kitchen equipment costing $60,000 by issuing a one-year, 5% note. Dec. 31 Accrued interest on the note payable. 2021 Aug. 1 Paid the note payable at maturity. Answer these questions for Joy’s Bar and Grill: 1. How much interest expense must be accrued at December 31, 2020? I don't understand the month parts, 5/12 for example as part of the answer, please explain, I'm confused. 2. Determine the amount of Joy’s final payment on July 31, 2021. 3. How much interest expense will Joy’s report for 2020 and for 2021?arrow_forward4. Subject :- Accountingarrow_forward
- Consider the following note payable transactions of Caleb Video Productions. 2018 Oct. 1 Purchased equipment costing $80,000 by issuing a five-year, 8% note payable. The note requires annual principal payments of $16,000 plus interest each October 1. Dec. 31 Accrued interest on the note payable. 2019 Oct. 1 Paid the first installment on the note. Dec. 31 Accrued interest on the note payable. Requirements Journalize the transactions for the company.arrow_forwardThe following transactions took place for Smart Solutions Inc. 2017 a. July 1 Loaned $65,000 to an employee of the company and received back a one-year, 10 percent note. b. Dec. 31 Accrued interest on the note. 2018 c. July 1 Received interest on the note. (No interest has been recorded since December 31.) d. July 1 Received principal on the note. Required: Prepare the journal entries that Smart Solutions Inc. would record for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 Record the receipt of a note on July 1, 2017 for a $65,000 loan to an employee. Note: Enter debits before credits. Date General Journal Debit Credit Jul 01, 2017arrow_forwardKeesha Co. borrows $200,000 cash on November 1, 2018, by signing a 90-day, 9% note with a face value of $200,000 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in 2018 and 2019 from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest at the end of 2018, and (c) payment of the note at maturity. (Assume no reversing entries are made.) Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 On what date does this note mature? On what date does this note mature?arrow_forward
- Question. Jamaica Corporation carried out the following transactions involving note payable. During the fiscal year ended December 31, 2020. Aug 6 Borrowed $ 15,200 from Tony Stark, issuing to him a 45 da, 14% note payable. Sept. 16 Purchased office equipment from Ikea Company. The invoice amount was $18,800 and Ikea Company agreed to accept as full payment a 3-month, 15% note for the invoice amount. Sept. 20 Paid Tony Stark note plus accrued interest. Nov.1 Borrowed $ 2,35,000 from Nation Commercial Bank at an interest rate of 12% per annum; signed a 90-days note payable for $ 2,42,256, which included a $7,056 interest charge in the face amount. Dec.1 Purchased merchandise in the amount of $13,000 from Stephens & Co. Gave in settlement a 60-day note nearing interest at 15% (Perpetual inventory system is deployed). Dec. 16 The $18,800 note payable to Ikea Company matured today. Paid the interest accrued and issued new 30-days, 12% note to replace the maturing…arrow_forwardConsider the following note payable transactions of Creative Video Productions. 2017 Aug. 1 Purchased equipment costing $16,000 by issuing a one-year, 9% note payable. Dec. 31 Accrued interest on the note payable. 2018 Aug. 1 Paid the note payable plus interest at maturity. Journalize the transactions for the company.arrow_forwardThe following selected transactions of Johnson Motors Company were completed during the current accounting year ended December 31, 2019: March 1 – Borrowed $25,000 on a two-year, 8% interest-bearing note. Interest is paid annually in 2020 and 2021. April 1 – Borrowed cash and signed a $20,000, one-year, noninterest-bearing note. The note was discounted at an annual interest rate of 6%. June 1 – Purchased a truck with a list price of $33,000. Paid $3,000 cash and signed a $30,000, one-year, noninterest-bearing note. The market rate for this type of note is 10%. The truck will be depreciated over five years using the straight-line method. The estimated salvage value is $5,000. September 1 - Sold $6,000 of gift cards. October 1 – Sold merchandise of $30,000 for cash. Gift cards of $2,000 were redeemed. The cost of the merchandise was $16,000. The merchandise carries a two-year warranty for parts and labor. A reasonable estimate of the cost of the warranty is 1.5% of sales…arrow_forward
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