Brief Exercise 7-8
Tony Acrobats lent $25,972 to Donaldson, Inc., accepting
Donaldson’s 2-year, $32,000, zero-interest-bearing note. The
implied interest rate is 11%.
Prepare Tony’s journal entries for the initial transaction,
recognition of interest each year, and the collection of $32,000 at
maturity. (Round answers to 0 decimal places, e.g.
5,275. If no entry is required, select "No Entry" for the account
titles and enter 0 for the amounts. Credit account titles are
automatically indented when the amount is entered. Do not indent
manually.)
No. |
Account Titles and Explanation |
Debit |
Credit |
1. | |||
(To record the initial transations) |
|||
2. | |||
(To record the recognition of interest in year one) |
|||
3. | |||
(To recognize the interest in year 2) |
|||
4. | |||
(To record the collection of the note) |
SHOW LIST OF ACCOUNTS Accounts Payable |
No. | Account Titles and explanation | Debit | credit |
1 | Note receivable | 32000 | |
Cash | 25972 | ||
Premium on note receivable | 6028 | ||
2 | Premium on notes receivable | 3031 | |
Interest revenue | 3031 | ||
3 | Premium on notes receivable | 3031 | |
Interest revenue | 3031 | ||
4 | cash | 32000 | |
Notes receivable | 32000 |
Brief Exercise 7-8 Tony Acrobats lent $25,972 to Donaldson, Inc., accepting Donaldson’s 2-year, $32,000, zero-interest-bearing note....
Steve Acrobats lent $13,798 to Donaldson, Inc., accepting Donaldson's 2-years, $17,000, zero-interest-bearing note. The implied interest rate is 11% Prepare Steve's journal entries for the initial transaction, recognition of interest each year, and the collection of $17,000 at maturity. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)...
Steve Acrobats lent $13,798 to Donaldson, Inc., accepting Donaldson's 2-years, $17,000, zero-interest-bearing note. The implied interest rate is 11%. Prepare Steve's journal entries for the initial transaction, recognition of interest each year, and the collection of $17,000 at maturity. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)...
Brief Exercise 7-10 Sheridan Incorporated factored $163,900 of accounts receivable with Skysong Factors Inc. on a without-recourse basis. Skysong assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Sheridan Incorporated and Skysong Factors to record the factoring of the accounts receivable to Skysong. (If no entry is required, select "No Entry" for the account titles and enter 0 for the...
II. Short Answer (5 points): Notes Receivable. Dold Acrobats lent $26,700 to Donaldson, Inc., accepting Donaldson's 2-year, $30,000, zero- interest-bearing note. The implied interest rate is 6%. Instructions: Prepare Dold Acrobats' journal entries for 1) the initial transaction, 2) recognition of interest in the 1st year, 3) recognition of interest in the 2 year, and 4) the collection of principal at maturity Round numbers to the nearest whole dollar.
IL Short Answer (5 points): Notes Receivable. Dold Acrobats lent $26,700 to Donaldson, Inc., accepting Donaldson's 2-year, $30,000, zero- interest-bearing note. The implied interest rate is 6%. Instructions: Prepare Dold Acrobats' journal entries for 1) the initial transaction, 2) recognition of intercer the 15 year, 3) recognition of interest in the 2 year, and 4) th monition of interest in the 2 year, and 4) the collection of principal at maturit Round numbers to the nearest whole dollar.
Brief Exercise 7-2 Cullumber Co. uses the gross method to record sales made on credit. On June 1, 2017, it made sales of $67,400 with terms 3/15, n/45. On June 12, 2017, Cullumber received full payment for the June 1 sale. Prepare the required journal entries for Cullumber Co. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not...
Sheffield Company loaned $83,306 to Hemingway, Inc, accepting Hemingway's 2-year, $100,800, zero-interest-bearing note. The implied interest rate is 10%. Prepare Sheffield's journal entries for the initial transaction, recognition of interest each year, and the collection of $100,800 at maturity. Account Titles and Explanation Debit Credit Notes Receivable 100800 Discount on Notes Receivable 17494 Cash 83306 (To record the receipt of the note at a discount.) Discount on Notes Receivable 8331 Interest Revenue 8331 (To record the interest revenue at the...
Exercise 7-21 Presented below is information for Metlock Company. 1. Beginning-of-the-year Accounts Receivable balance was $23,200. 2. Net sales (all on account) for the year were $106,000. Metlock does not offer cash discounts. 3. Collections on accounts receivable during the year were $82,500. Metlock is planning to factor some accounts receivable at the end of the year. Accounts totaling $12,400 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 7% of the balances for probable adjustments...
Problem 7-6 The balance sheet of Ivanhoe Company at December 31, 2016, includes the following. Notes receivable $51,200 Accounts receivable 195,600 Less: Allowance for doubtful accounts 24,600 $222,200 Transactions in 2017 include the following. 1. Accounts receivable of $151,300 were collected including accounts of $67,500 on which 4% sales discounts were allowed. 2. $5,670 was received in payment of an account which was written off the books as worthless in 2016. 3. Customer accounts of $24,800 were written off during...
Exercise 7-8 At the end of 2017, Headland Company has accounts receivable of $868,800 and an allowance for doubtful accounts of $49,900. On January 16, 2018, Headland Company determined that its receivable from Ramirez Company of $7,190 will not be collected, and management authorized its write-off. Prepare the journal entry for Headland Company to write off the Ramirez receivable. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles...