Question

SHORT ANSWER. Write the word or phrase that best completes each st o rmwer the que B) Rene Hernition: On February 14, 2018, Prime Company sold 50 air-conditioning units to LAP Heating and Cooling. The units list for $700 each, but the customer was granted a 30% trade discount. All of Prime's sales are subject to terms 2/10, Required: 1. Using the current revenue recognition standards, prepare the journal entry to record the sale. 2. Prepare the journal entry to record receipt of the payment, assuming the correct amount was received on February 22, 2018 3. Prepare the journal entry to record receipt of the payment, assuming the full amount was received on March 10, 2018 ESSAY. Write your answer in the space provided or on a separate sheet of paper 9) Assignment of Receivables: On 06/20/18. The Mountain Sports Company had outstanding accounts receivable of $800,000. On July 1, 2018, the company borrowed $450,000 from the Chase Bank and signed a promissory note. Interest at 8% payable monthly. Chase Bank charges a finance fee equal to 2% of the accounts receivable assigned REQUIRED: Prepare the journal entry to record the borrowing on the books of the Mountain Sports Company. 10) Factoring Without Recourse On 07/01/18, Barista Coffee Exporters transfers $650,000 of specific receivables to the Bank of America (BOA) without recourse, BOA remits 90% of the factored amount and retains 10%. When BOA collects from the customers, it remits to Barista Coffee Exporters the retained amountless a 3% fee (3% of the total factored amount). Barista estimates the value value of the retained receivables to be $65,000 REQUIRED: Prepare the journal entry on 07/01/18 to record the transfer of the receivables 11) Time Value of Money Problem: Price of Bond On the last day of its fiscal year ending December 31, 2016, XYZ Company issued 6% stated rate bonds with a face amount of $200 million. The bonds mature on December 31, 2036 (20 years). The market rate of interest for similar bond issues was 8% (4% semiannual rate). Interest is paid semiannually (396) on June 30 and December 31, beginning on June 30, 2017 Required: Compute the price of the Bonds. Show your computations

Answer 1

Answer to Question No. 8: Credit No. 1. Date Feb 14, 2018 Debit 24,500 24,500 | 2. I Feb 22, 2018 Account Titles and Explanation Accounts Receivable (50 * $700 * 70%) Sales Revenue (To record sales made on account) Cash ($24,500 * 98%) Sales Discounts ($24,500 * 2%) Accounts Receivable (To record cash collection within discount period) Cash Accounts Receivable (To record cash collection after discount period) 24,010 490 24,500 3. 24,500 Mar 10, 2018 24,500