Question 3 (20 marks)
Unit 7 – Liabilities
Fixer Upper Housing Limited purchased equipment costing $200,000 on October 1, 2019, by paying 10% down and signing an 8%, 9-month note payable for the balance. Fixer Upper Housing Limited's year end is December 31.
Debit |
Credit |
||
Oct 1, 2019 |
|||
Dec 31, 2019 |
|||
June 30, 2020 |
|||
. |
Date | General Journal | Debit | Credit |
Oct 1, 2019 | Equipment | $200,000 | |
Cash | $20,000 | ||
Note payable | $180,000 | ||
( To record purchase of equipment) | |||
Dec 31, 2019 | Interest expense | $3,600 | |
Interest payable | $3,600 | ||
( To record interest expense) | |||
June 30, 2020 | Note payable | $180,000 | |
Interest payable | $3,600 | ||
Interest expense | $7,200 | ||
Cash | $190,800 | ||
( To record note at maturity) |
Interest payable on December 31, 2019 = Note payable x Interest rate x 3/12
= 180,000 x 8% x 3/12
= $3,600
Interest expense on June 30, 2020 = Note payable x Interest rate x 6/12
= 180,000 x 8% x 6/12
= $7,200
Kindly comment if you need further assistance. Thanks
Question 3 (20 marks) Unit 7 – Liabilities Fixer Upper Housing Limited purchased equipment costing $200,000...
Question 4 (20 marks) Unit 7 – Liabilities Fixer Upper Housing Limited purchased equipment costing $150,000 on October 1, 2019, by paying 10% down and signing an 8%, 9-month note payable for the balance. Fixer Upper Housing Limited's year end is December 31. Prepare journal entries to record the purchase of the equipment, the accrual of interest on December 31, and the payment of the note at maturity. For ease of computation assume that Fixer Upper calculates interest expense based...
Unit 7 – Liabilities Fixer Upper Housing Limited purchased equipment costing $150,000 on October 1, 2019, by paying 10% down and signing an 8%, 9-month note payable for the balance. Fixer Upper Housing Limited's year end is December 31. Prepare journal entries to record the purchase of the equipment, the accrual of interest on December 31, and the payment of the note at maturity. For ease of computation assume that Fixer Upper calculates interest expense based on the number of...
Fixer Upper Housing Limited purchased equipment costing $200,000 on October 1, 2019, by paying 10% down and signing an 8%, 9-month note payable for the balance. Fixer Upper Housing Limited's year end is December 31. Prepare journal entries to record the purchase of the equipment, the accrual of interest on December 31, and the payment of the note at maturity. For ease of computation assume that Fixer Upper calculates interest expense based on the number of months, outstanding, rather than...
Question2 Singh Limited purchased equipment costing $150,000 on October 1, 2016, by paying 10% down and signing an 8%, 9-month note payable for the balance. Solvency Limited's year end is December 31. a. Prepare journal entries to record the purchase of the equipment, the accrual of interest on December 31, and the payment of the note at maturity. For ease of computation assume that Solvency calculates interest expense based on the number of months, outstanding, rather than the number of...
BUSI 1043 Summer 2020 Final Version - saved M File Home Table Open in Desktop App O Search B 1 E. book value per common share of stock mchat Page Break mind Question 4 (20 marks) Unit 7 - Liabilities a. Fixer Upper Housing Limited purchased equipment costing $150,000 on October 1, 2019, by paying 10% down and signing an 8% 9-month note payable for the balance. Fier Upper Housing Limited's year end is December 31 Prepare journal entries to...
As the accountant for Awesome Foods Incorporated, you are responsible for preparing the cash flow statement. You have decided to prepare the statement using the indirect method and have gathered the following data from the accounting records Principal payments on non-current debt$ 50,000 Collections on accounts receivable287,500 Increase in accounts payable24,300 Acquisition of equipment by issuing non-current note payable70,000 Depreciation expense71,300 Collection of loan principal58,000 Proceeds from sale of investments, not including $5,100 gain49,100 Increase in accounts receivable7,200 Cash payments...
Question 3 (20 marks) a. Milton Electronics Inc. purchased inventory costing $72,000 by signing an 9-month, 8% note payable on Oct 1 2019. The note will be repaid with interest at maturity. Prepare journal entries to record the purchase of the inventory, accrual of interest on Dec 31, 2019 and the final repayment of the note at maturity. (10 marks) b. Milton Electronics Inc. started its business in 2019 and sold electronics worth $125,000 in 2019. The company provided a...
Question 3 (20 marks) Milton Electronics Inc. purchased inventory costing $48,000 by signing a 6-month, 6% note payable on Oct 1 2019. The note will be repaid with interest at maturity. Prepare journal entries to record the purchase of the inventory, accrual of interest on Dec 31, 2019 and the final repayment of the note at maturity. (10 marks) Milton Electronics Inc. started its business in 2019 and sold electronics worth $140,000 in 2019. The company provided a 2- year...
Main Company has a fiscal year ending on December 31. The company purchased equipment costing S88.000 on October 2, 2011. The equipment was purchased by paying 30% down and signing a 9%, 120-day note payable for the balance. 1. Prepare the journal entries to record the following events. Use a 360-day year and round all amounts to the nearest dollar. The purchase of the equipment on October 2, 2011 The accrual of interest on December 31, 2011 Payment of the...
Question 3 (20 marks) 2 a. Milton Electronics Inc. purchased inventory costing $56,000 by signing an 6-month, 5% note payable on Sept 1 2019. The note will be repaid with interest at maturity. Prepare journal entries to record the purchase of the inventory, accrual of interest on Dec 31, 2019 and the final repayment of the note at maturity. (10 marks) b. Milton Electronics Inc. started its business in 2019 and sold electronics worth $180,000 in 2019. The company provided...