Problem 5-8B Record long-term notes receivable and interest revenue (LO5-7)
On April 15, 2021, Sampson Consulting provides services to a
customer for $92,000. To pay for the services, the customer signs a
three-year, 9% note. The face amount is due at the end of the third
year, while annual interest is due each April 15. (Hint:
Because the note is accepted during the middle of the month,
Sampson plans to recognize one-half month of interest revenue in
April 2021, and one-half month of interest revenue in April
2024.)
Required:
- Record the acceptance of the note on April 15, 2021.
- Record the interest collected on April 15 for 2022 and 2023, and the adjustment for interest revenue on December 31, 2021, 2022, and 2023.
- Record the cash collection on April 15, 2024.
Prepare the journal entries for the above transactions.
(Do not round intermediate calculations.
If no entry is required for a particular transaction/event, select
"No Journal Entry Required" in the first account
field.)
Homework Answers
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Problem 5-8B Record long-term notes receivable and interest
revenue (LO5-7)
On April 15, 2021, Sampson Consulting...
On April 15, 2021, Sampson Consulting provides services to a customer for $94,000. To pay for...
On April 15, 2021, Sampson Consulting provides services to a customer for $94,000. To pay for the series, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each April 15. (Hint: Because the note is accepted during the middle of the month, Sampson plans to recognize one-half month of interest revenue in April 2021, and one-half month of interest revenue in April 2024) Required: 1....
Required information Problem 5-2B Record transactions related to credit sales and contra revenues (LO5-1, 5-2) [The...
Required information Problem 5-2B Record transactions related to credit sales and contra revenues (LO5-1, 5-2) [The following information applies to the questions displayed below. Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offers a 20% discount to students and faculty at educational institutions. Consider the following transactions during the month of June. June 10 Rashid's hard drive crashes...
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty...
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $490,000 to its supplier using a 12-month, 10% note. Required: (027104 1. The loan of $490,000 and acceptance of the note receivable on April 1, 2021 2. The adjustment for accrued interest on December 31,...
On December 1, 2021, Liang Chemical provides services to a customer for $85.000. In payment for...
On December 1, 2021, Liang Chemical provides services to a customer for $85.000. In payment for the services, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each December 1 Required: 1. Record the acceptance of the note on December 1, 2021. 2. Record the interest collected on December 1 for 2022 and 2023, and the adjustment for interest revenue on December 31 for 2021....
On December 1, 2021, Liang Chemical provides services to a customer for $78,000. In payment for...
On December 1, 2021, Liang Chemical provides services to a customer for $78,000. In payment for the services, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each December 1. Required: 1. Record the acceptance of the note on December 1, 2021. 2. Record the interest collected on December 1 for 2022 and 2023, and the adjustment for interest revenue on December 31 for 2021,...
Interest Revenue Cypress O Company's December 31, 2021, balance sheet listed $1.074,000 of notes receivable and...
Interest Revenue
Cypress O Company's December 31, 2021, balance sheet listed $1.074,000 of notes receivable and $24,600 of interest receivable included in current assets. The following notes make up the notes receivable balance Note 1 Dated B/31/2021, principal of $450, see and interest at 12% due on 2/28/2022. Note 2 Dated 6/30/2021, principal of $330,000 and interest due 3/31/2022. Note ) $100,eee face value noninterest-bearing note dated 9/30/2021, due 3/31/2022. Note was issued in exchange for merchandise The company records...
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...
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Exercise 7-18 (Algo) Notes receivable [LO7-7] On June 30, 2021, the Esquirempany sold some merchandise to a customer for $62,000. In payment, Esquire agreed to accepta 6% note requiring the payment of interest and principal on March 31, 2022. The 6% 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...
Problem 8-2B Record notes payable and notes receivable (LO8-2) [The following information applies to the questions...
Problem 8-2B Record notes payable and notes receivable
(LO8-2)
[The following
information applies to the questions displayed below.]
Eskimo Joe’s,
designer of the world’s second best-selling T-shirt (just behind
Hard Rock Cafe), borrows $19.9 million cash on November 1,
2021. Eskimo Joe’s signs a six-month, 9% promissory note to
Stillwater National Bank under a prearranged short-term line of
credit. Interest on the note is payable at maturity. Each firm has
a December 31 year-end.
Required information Problem 8-2B Record notes...
On April 15, 2021, Sampson Consulting provides services to a customer for $94,000. To pay for the series, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each April 15. (Hint: Because the note is accepted during the middle of the month, Sampson plans to recognize one-half month of interest revenue in April 2021, and one-half month of interest revenue in April 2024) Required: 1....
Required information Problem 5-2B Record transactions related to credit sales and contra revenues (LO5-1, 5-2) [The following information applies to the questions displayed below. Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offers a 20% discount to students and faculty at educational institutions. Consider the following transactions during the month of June. June 10 Rashid's hard drive crashes...
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $490,000 to its supplier using a 12-month, 10% note. Required: (027104 1. The loan of $490,000 and acceptance of the note receivable on April 1, 2021 2. The adjustment for accrued interest on December 31,...
On December 1, 2021, Liang Chemical provides services to a customer for $85.000. In payment for the services, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each December 1 Required: 1. Record the acceptance of the note on December 1, 2021. 2. Record the interest collected on December 1 for 2022 and 2023, and the adjustment for interest revenue on December 31 for 2021....
Interest Revenue
Cypress O Company's December 31, 2021, balance sheet listed $1.074,000 of notes receivable and $24,600 of interest receivable included in current assets. The following notes make up the notes receivable balance Note 1 Dated B/31/2021, principal of $450, see and interest at 12% due on 2/28/2022. Note 2 Dated 6/30/2021, principal of $330,000 and interest due 3/31/2022. Note ) $100,eee face value noninterest-bearing note dated 9/30/2021, due 3/31/2022. Note was issued in exchange for merchandise The company records...
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...
Exercise 7-18 (Algo) Notes receivable [LO7-7] On June 30, 2021, the Esquirempany sold some merchandise to a customer for $62,000. In payment, Esquire agreed to accepta 6% note requiring the payment of interest and principal on March 31, 2022. The 6% 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...
Problem 8-2B Record notes payable and notes receivable
(LO8-2)
[The following
information applies to the questions displayed below.]
Eskimo Joe’s,
designer of the world’s second best-selling T-shirt (just behind
Hard Rock Cafe), borrows $19.9 million cash on November 1,
2021. Eskimo Joe’s signs a six-month, 9% promissory note to
Stillwater National Bank under a prearranged short-term line of
credit. Interest on the note is payable at maturity. Each firm has
a December 31 year-end.
Required information Problem 8-2B Record notes...
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