Homework Answers
| SOLUTION : 1, 2 & 4 | |||||||||||
| Journal Entries | IMPACT ON FINANCIAL STATEMENTS | ||||||||||
| Date | Account Title and explanation | Debit | Credit | BALANCE SHEET | INCOME STATEMENT | ||||||
| ASSETS | LIABILITIES | EQUITY | REVENUE | EXPENSES | NET INCOME | ||||||
| Septemebr 30, 2020 | Cash | $ 4,66,000 | $ 4,66,000 | $ 4,66,000 | $ - | $ - | $ - | $ - | |||
| 8% Note Payable | $ 4,66,000 | ||||||||||
| December 31, 2020 | Interest Expenses ($ 466,000 X 8% X 3/12 months) | $ 9,320 | $ - | $ 9,320 | $ -9,320 | $ - | $ 9,320 | $ -9,320 | |||
| Interest Payable | $ 9,320 | ||||||||||
| March 31, 2021 | Interest Expenses ($ 466,000 X 8% X 3/12 months) | $ 9,320 | $ -9,320 | $ -9,320 | $ 9,320 | $ -9,320 | |||||
| Interest Payable | $ 9,320 | ||||||||||
| 8% Note Payable | $ 4,66,000 | $ -4,66,000 | |||||||||
| Cash | $ 4,84,640 | $ -4,66,000 | |||||||||
| SOLUTION : 3 | |||||||||||
| BALANCE SHEET (PARTIAL) | |||||||||||
| Current Liabilities: | |||||||||||
| 8% Note Payable | $ 4,66,000 | ||||||||||
| Interest Payable | $ 9,320 | ||||||||||
| Total | $ 4,75,320 | ||||||||||
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Required:
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On September 1, 2017, Seacrest Inc. accepted a six-month, 7%,
$37,800 interest-bearing note from Delgado Enterprises in payment
of an account receivable. Seacrest's year-end is December 31.
Delgado paid the note and interest on the due date. Assume 360 days
in the year.
Required:
1. Who is the maker and who is the payee of the
note?
The maker is and the payee is .
2. What is the maturity date of the
note?
3. Identify and analyze the effect...
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On January 1, 2019, Worthylake Company sold used machinery to
Brown Company, accepting a $25,000, non-interest-bearing note
maturing on January 1, 2021. Worthylake carried the machinery on
its books at a cost of $21,000 and a current book value of $16,000.
Neither the fair value of the machinery nor the note was
determinable at the time of sale; however, Brown’s incremental
borrowing rate was 10%.
Required:
Prepare the journal entries on Worthylake’s books to
record:
1.
sale of the machinery...
Instructions Faraday Electronic Service repairs stereos and DVD players. During 2019, Faraday engaged in the following activities: a. On September 1, Faraday paid Wausau Insurance $4,860 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance. b. At December 31, Faraday estimates that $1,520 of utility costs are unrecorded and unpaid. c. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $1,440 is unpaid and unrecorded...
Instructions Reynolds Computer Service offers data processing services to retail clothing stores. The following data have been collected to aid in the preparation of adjusting entries for Reynolds Computer Service for 2019: a. Computer equipment was purchased from IBM in 2016 at a cost of $550,000. Annual depreciation is $130,000 b. A fire insurance policy for a 2-year period beginning September 1, 2019, was purchased from Good Hands Insurance Company for $13.680 cash. The entire amount of the prepayment was...
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Notes Receivable On September 1, 2017, Seacrest Inc, accepted a six-month, $48,600 interest-bearing note from Delgado Enterprises in payment of an account receivable. Seacrest's year-end is December 31. Delgado paid the note and interest on the due date. Assume 360 days in the year, Required: 1. Who is the maker and who is the payee of the note? The makers Seacrest Inc. and the payee is Delgado Enterprises 2. What is the maturity date of the note> March 1, 2018...
Notes Receivable
On September 1, 2017, Seacrest Inc. accepted a six-month, 7%,
$37,800 interest-bearing note from Delgado Enterprises in payment
of an account receivable. Seacrest's year-end is December 31.
Delgado paid the note and interest on the due date. Assume 360 days
in the year.
Required:
1. Who is the maker and who is the payee of the
note?
The maker is and the payee is .
2. What is the maturity date of the
note?
3. Identify and analyze the effect...
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