Homework Answers
| Date | Account Name | Debit | Credit | |
| a) | Feb. 1, 2020 | 8% Notes Receivable | $80,000 | |
| Capital Reserve ($80,000 - $24,000) | $56,000 | |||
| Land | $24,000 | |||
| (To record the receipt of 8% note for exchange of land) | ||||
| b) | Mar. 1, 2020 | Interest Receivable | $533 | |
| Interest Revenue ($80,000*8/100*1/12 months) | $533 | |||
| (To record the interest earned and receivable) | ||||
| Mar. 1, 2020 | Cash ($80,000 + [$80,000*8/100*6/12 months] - [$80,000*10/100*5/12 months]) | $74,867 | ||
| Loss on sale of 8% notes receivable ($80,000 + $533 - $74,867) | $5,666 | |||
| Interest Receivable | $533 | |||
| 8% Notes Receivable | $80,000 | |||
| (To record the settlement of 8% notes receivable) |
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Recording Entries for the Discounting of a Note Receivable Aerobic Sports Company completed the following 2020...
Recording Entries for the Discounting of a Note Receivable Aerobic Sports Company completed the following 2020...
Recording Entries for the Discounting of a Note
Receivable
Aerobic Sports Company completed the following 2020 transactions
related to a note receivable.
Prepare the journal entries, including any interest earned, that
Aerobic Sports Company should make on February 1, 2020, and March
1, 2020.
Note: Round your answers to the nearest whole
dollar.
a. February 1, 2020—Received a $520,000, 9%, interest-bearing,
six-month note from Temple Company for land that had a carrying
value of $156,000.
. INILUTY LULU ILIVU T...
Recording Entries for Long-Term Note Receivable; Effective-Interest Method On January 1, 2020, Jacobs Company sells land...
Recording Entries for Long-Term Note Receivable; Effective-Interest Method On January 1, 2020, Jacobs Company sells land financed through a $72,000 note, issued by Andress Company. The note is a $72,000, 5%, annual interest-bearing note. Andress agrees to repay $72,000 proceeds on December 31, 2021. The prevailing interest rate on similar notes is 6%. Assume that the cost of the land is equal to the fair value of the note. Required Prepare all entries for Jacobs over the note term, including...
Check m 3. Problem 16.5A Recording the receipt, discounting, and payment of notes receivable. LO 16-3,...
Check m 3. Problem 16.5A Recording the receipt, discounting, and payment of notes receivable. LO 16-3, 16-4, 16-6, 16-7 25 points On May 16, 2019, Safeway Company received a 90-day, 8 percent, $6,200 interest beraring note from Black Company in settlement of Black's past-due account. On June 30, Safeway discounted this note at Fargo Bank and Trust. The bank charged a discount rate of 13 percent. On August 15, Safeway recelved a notice that Black had paid the note and...
Preparing Entries and Interest Schedule for Long-Term Note Receivable; Effective Interest Method On April 1, 2020,...
Preparing Entries and Interest Schedule for Long-Term Note Receivable; Effective Interest Method On April 1, 2020, Mountain Company sold merchandise and received a $19,200, three-year, noninterest-bearing note. The market rate is 6%. Mountain Company has a March 31 year-end. The company uses the effective interest method to amortize any discount. Required Prepare all entries for Mountain Company over the note's term, including year-end adjustments. Note: Round amounts to the nearest whole dollar. Note: If multiple credits are required, list accounts...
Preparing Entries and Interest Schedule for Long-Term Note Receivable; Effective Interest Method On April 1, 2020,...
Preparing Entries and Interest Schedule for Long-Term Note Receivable; Effective Interest Method On April 1, 2020, Mountain Company sold merchandise and received a $21,600, three-year, noninterest-bearing note. The market rate is 8%. Mountain Company has a March 31 year-end. The company uses the effective interest method to amortize any discount. Required Prepare all entries for Mountain Company over the note's term, including year-end adjustments. Note: Round amounts to the nearest whole dollar. Note: If multiple credits are required, list accounts...
3 of 4. Discounting a Note Receivable Cleveland Company obtained a $15,000 note receivable from a...
3 of 4. Discounting a Note Receivable Cleveland Company obtained a $15,000 note receivable from a customer on Jan 1, 2018. The note, along with interest at 10%, is due on July 1, 2018. On Feb 28, 2018, Cleveland discounted the note at Cincinnati Bank. The bank's discount rate is 12%. Prepare the journal entries required on Feb 28, 2018, to accrue interest and to record the discounting (round all calculations to the nearest dollar) for Cleveland. Chapter 10: PPE...
Exercise 16.6 Recording receipt of a note receivable and subsequent discounting of the note. LO 16-7...
Exercise 16.6 Recording receipt of a note receivable and subsequent discounting of the note. LO 16-7 On June 3, 2019, Alaska State Company received a $5,000, 60 day, 12 percent note from Samuel Adams, a customer whose account was past due. The note was discounted on June 18, 2019 at the Second State Bank and Trust. The bank charged a discount rate of 14%. 1. Prepare the journal entries regarding this note. (Use 360 days a year. Round your answers...
Recording Entries for Equity Investment: Equity Method On January 1, 2020, Mercedez Company purchased 360 of...
Recording Entries for Equity Investment: Equity Method On January 1, 2020, Mercedez Company purchased 360 of the 900 outstanding shares of Auto Supplies Inc. for $36,000. At that date, the balance sheet of Auto Supplies Inc. showed the following values. Assets not subject to depreciation Assets subject to depreciation Liabilities Common stock (par $1) Retained earnings $36.000 * 23,400 ** 5,400 * 45,000 9,000 * Same as fair value. ** Fair value $27,000; the assets have a 10-year remaining useful...
cCan someone let me know if this is correct? Recording Noninterest-Bearing Note Payable Entries First Choice...
cCan someone let me know if this is
correct?
Recording Noninterest-Bearing Note Payable Entries First Choice Company buys equipment on October 1, 2020, providing as payment a noninterest-bearing note for $32,000 to be paid one year from today. The equipment could be purchased for $29,091 in cash today. Record the entries for First Choice Company on the following dates. a. Issuance of the note on October 1, 2020. b. Adjusting entry on December 31, 2020, First Choice Company's fiscal year-end....
Preparing Entries and Interest Schedule for Long-Term Note Receivable: Effective Interest Method On April 1, 2020,...
Preparing Entries and Interest Schedule for Long-Term Note Receivable: Effective Interest Method On April 1, 2020, Mountain Company sold merchandise and received a $33,600, three-year, noninterest-bearing note. The market rate is 10% Mountain Company has a March 31 year end. The company uses the effective interest method to amortize any discount Required Prepare all entries for Mountain Company over the note's term, including year-end adjustments. Note: Round amounts to the nearest whole dollar. Note: If multiple credits are required, list...
Recording Entries for the Discounting of a Note
Receivable
Aerobic Sports Company completed the following 2020 transactions
related to a note receivable.
Prepare the journal entries, including any interest earned, that
Aerobic Sports Company should make on February 1, 2020, and March
1, 2020.
Note: Round your answers to the nearest whole
dollar.
a. February 1, 2020—Received a $520,000, 9%, interest-bearing,
six-month note from Temple Company for land that had a carrying
value of $156,000.
. INILUTY LULU ILIVU T...
Recording Entries for Long-Term Note Receivable; Effective-Interest Method On January 1, 2020, Jacobs Company sells land financed through a $72,000 note, issued by Andress Company. The note is a $72,000, 5%, annual interest-bearing note. Andress agrees to repay $72,000 proceeds on December 31, 2021. The prevailing interest rate on similar notes is 6%. Assume that the cost of the land is equal to the fair value of the note. Required Prepare all entries for Jacobs over the note term, including...
Check m 3. Problem 16.5A Recording the receipt, discounting, and payment of notes receivable. LO 16-3, 16-4, 16-6, 16-7 25 points On May 16, 2019, Safeway Company received a 90-day, 8 percent, $6,200 interest beraring note from Black Company in settlement of Black's past-due account. On June 30, Safeway discounted this note at Fargo Bank and Trust. The bank charged a discount rate of 13 percent. On August 15, Safeway recelved a notice that Black had paid the note and...
Preparing Entries and Interest Schedule for Long-Term Note Receivable; Effective Interest Method On April 1, 2020, Mountain Company sold merchandise and received a $19,200, three-year, noninterest-bearing note. The market rate is 6%. Mountain Company has a March 31 year-end. The company uses the effective interest method to amortize any discount. Required Prepare all entries for Mountain Company over the note's term, including year-end adjustments. Note: Round amounts to the nearest whole dollar. Note: If multiple credits are required, list accounts...
Preparing Entries and Interest Schedule for Long-Term Note Receivable; Effective Interest Method On April 1, 2020, Mountain Company sold merchandise and received a $21,600, three-year, noninterest-bearing note. The market rate is 8%. Mountain Company has a March 31 year-end. The company uses the effective interest method to amortize any discount. Required Prepare all entries for Mountain Company over the note's term, including year-end adjustments. Note: Round amounts to the nearest whole dollar. Note: If multiple credits are required, list accounts...
3 of 4. Discounting a Note Receivable Cleveland Company obtained a $15,000 note receivable from a customer on Jan 1, 2018. The note, along with interest at 10%, is due on July 1, 2018. On Feb 28, 2018, Cleveland discounted the note at Cincinnati Bank. The bank's discount rate is 12%. Prepare the journal entries required on Feb 28, 2018, to accrue interest and to record the discounting (round all calculations to the nearest dollar) for Cleveland. Chapter 10: PPE...
Exercise 16.6 Recording receipt of a note receivable and subsequent discounting of the note. LO 16-7 On June 3, 2019, Alaska State Company received a $5,000, 60 day, 12 percent note from Samuel Adams, a customer whose account was past due. The note was discounted on June 18, 2019 at the Second State Bank and Trust. The bank charged a discount rate of 14%. 1. Prepare the journal entries regarding this note. (Use 360 days a year. Round your answers...
Recording Entries for Equity Investment: Equity Method On January 1, 2020, Mercedez Company purchased 360 of the 900 outstanding shares of Auto Supplies Inc. for $36,000. At that date, the balance sheet of Auto Supplies Inc. showed the following values. Assets not subject to depreciation Assets subject to depreciation Liabilities Common stock (par $1) Retained earnings $36.000 * 23,400 ** 5,400 * 45,000 9,000 * Same as fair value. ** Fair value $27,000; the assets have a 10-year remaining useful...
cCan someone let me know if this is
correct?
Recording Noninterest-Bearing Note Payable Entries First Choice Company buys equipment on October 1, 2020, providing as payment a noninterest-bearing note for $32,000 to be paid one year from today. The equipment could be purchased for $29,091 in cash today. Record the entries for First Choice Company on the following dates. a. Issuance of the note on October 1, 2020. b. Adjusting entry on December 31, 2020, First Choice Company's fiscal year-end....
Preparing Entries and Interest Schedule for Long-Term Note Receivable: Effective Interest Method On April 1, 2020, Mountain Company sold merchandise and received a $33,600, three-year, noninterest-bearing note. The market rate is 10% Mountain Company has a March 31 year end. The company uses the effective interest method to amortize any discount Required Prepare all entries for Mountain Company over the note's term, including year-end adjustments. Note: Round amounts to the nearest whole dollar. Note: If multiple credits are required, list...
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