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On November 1, 2015 , ABC Corp borrowed $100,000 cash on a 1
year,
6% note payable that requires ABC to pay both principal
and interest on October 31,2016. Given no prior adjusting entries
have been recorded, the adjusting journal entry on December 31,
2015, ABC's year end, would include a
A. credit to Cash of $1,000
B. credit to Interest Payable of $1,000
C. credit to Note Payable of $1,000
D. debit to Interest Expense of $6,000
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Following are selected transactions relating to Star Company
during 2015:
2015
Nov
30:
Purchased merchandise inventory in the amount of $23,000, plus
recoverable HST at 13%, on credit from Hudson Inc. Terms of credit
are N/30.
Dec
11:
Borrowed $15,000.00 from ABC Bank by signing a 90 day, 8% note
payable.
Dec
27:
Recorded merchandise sales on credit for $ 13,000 plus 13 % HST.
Terms of credit are N30 and the cost of the merchandise sold was $
5,750....
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On June 30, 2016, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate requiring the payment of $30,000 on March 31, 2017. The 8% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2016 Interest accrual, and the March...
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On June 30, 2018, the Esquire Company sold some merchandise to a customer for $44,000. In payment, Esquire agreed to accept a 7% note requiring the payment of interest and principal on March 31, 2019. The 7% rate is appropriate in this situation. Required 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2018 interest accrual, and the March 31, 2019 collection...
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Fly Away Inc. borrowed $120,000 on October 1 by signing a note payable to Avenue One Bank. The interest expense for each month is $600. The loan agreement requires Fly Away Inc. to pay interest on December 31. 1. 2. Make Fly Away Inc.'s adjusting entry to accrue interest expense and interest payable at October 31, at November 30, and at December 31. Date each entry and include its explanation. Post all three entries to the Interest Payable account. You...
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On June 30, 2021, the Esquire Company sold some merchandise to a customer for $64,000. In payment, Esquire agreed to accept a 7% note requiring the payment of interest and principal on March 31, 2022. The 7% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection....
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On November 1, Jasper Company loaned another company $100.000 at a 6.0% interest rate. The note receivable plus interest will not be collected until March of the following year. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. The adjusting entry needed on December 31 is: Multiple Choice No entry required Debit interest Expense,55,000 credit Interest Payable, $5,000 Debit interest Expense, $1000; credit Note Payable, $1,000, Debit interest Receivable, 5500 credit interest Revenue,...
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Quick Trips Cheap Inc. borrowed $97,000 on October 1 by signing a note payable to Metro One Bank. The interest expense for each month is $445. The loan agreement requires Quick Trips Cheap Inc. to pay interest on December 31. 1. Make Quick Trips Cheap Inc.'s adjusting entry to accrue interest expense and interest payable at October 31, at November 30, and at December 31. Date each entry and include its explanation. 2. Post all three entries to the Interest...
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The unadjusted trial balance for a company as of December 31, 2015 appears below. Debit Credit Cash $1,200 900 Accounts Receivable Prepaid Insurance Supplies Land Office Furniture 900 2,000 10,000 4,500 Accounts Payable 900 Unearned Revenue 1,500 Note Payable 5,500 Common Stock 3,000 Retained Earnings 7,400 Dividends 1,100 Service Revenues 4,100 Rent Expense 600 Salaries Expense 1.200 $22,400 $22,400 Additional Information: 1. The Company paid $900 for a one-year insurance policy on July 1, 2015 2. The office furniture was...
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Problem 1: Excellsior corp. made a sale to a foreign customer on December 1, 2015 for 50,000 foreign currency units (FCU). Excellsior collected payment on January 31, 2016. The following exchange rates apply: Date 12/01/2015 12/15/2015 12/31/2015 01/31/2016 U.S. Dollar per FCU 0.50 0.52 0.48 0.52 1. What journal entry should be reported by Excellsior on the date of sale? a. Credit Sales: $50,000 b. Credit Sales: F50,000 C. Credit Sales: $25,000 d. Debit Sales: $25,000 e. None of the...
On June 30, 2016, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate requiring the payment of $30,000 on March 31, 2017. The 8% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2016 Interest accrual, and the March...
On June 30, 2018, the Esquire Company sold some merchandise to a customer for $44,000. In payment, Esquire agreed to accept a 7% note requiring the payment of interest and principal on March 31, 2019. The 7% rate is appropriate in this situation. Required 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2018 interest accrual, and the March 31, 2019 collection...
Fly Away Inc. borrowed $120,000 on October 1 by signing a note payable to Avenue One Bank. The interest expense for each month is $600. The loan agreement requires Fly Away Inc. to pay interest on December 31. 1. 2. Make Fly Away Inc.'s adjusting entry to accrue interest expense and interest payable at October 31, at November 30, and at December 31. Date each entry and include its explanation. Post all three entries to the Interest Payable account. You...
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $64,000. In payment, Esquire agreed to accept a 7% note requiring the payment of interest and principal on March 31, 2022. The 7% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection....
On November 1, Jasper Company loaned another company $100.000 at a 6.0% interest rate. The note receivable plus interest will not be collected until March of the following year. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. The adjusting entry needed on December 31 is: Multiple Choice No entry required Debit interest Expense,55,000 credit Interest Payable, $5,000 Debit interest Expense, $1000; credit Note Payable, $1,000, Debit interest Receivable, 5500 credit interest Revenue,...
Quick Trips Cheap Inc. borrowed $97,000 on October 1 by signing a note payable to Metro One Bank. The interest expense for each month is $445. The loan agreement requires Quick Trips Cheap Inc. to pay interest on December 31. 1. Make Quick Trips Cheap Inc.'s adjusting entry to accrue interest expense and interest payable at October 31, at November 30, and at December 31. Date each entry and include its explanation. 2. Post all three entries to the Interest...
The unadjusted trial balance for a company as of December 31, 2015 appears below. Debit Credit Cash $1,200 900 Accounts Receivable Prepaid Insurance Supplies Land Office Furniture 900 2,000 10,000 4,500 Accounts Payable 900 Unearned Revenue 1,500 Note Payable 5,500 Common Stock 3,000 Retained Earnings 7,400 Dividends 1,100 Service Revenues 4,100 Rent Expense 600 Salaries Expense 1.200 $22,400 $22,400 Additional Information: 1. The Company paid $900 for a one-year insurance policy on July 1, 2015 2. The office furniture was...
Problem 1: Excellsior corp. made a sale to a foreign customer on December 1, 2015 for 50,000 foreign currency units (FCU). Excellsior collected payment on January 31, 2016. The following exchange rates apply: Date 12/01/2015 12/15/2015 12/31/2015 01/31/2016 U.S. Dollar per FCU 0.50 0.52 0.48 0.52 1. What journal entry should be reported by Excellsior on the date of sale? a. Credit Sales: $50,000 b. Credit Sales: F50,000 C. Credit Sales: $25,000 d. Debit Sales: $25,000 e. None of the...