Question

33. Yang Company lends Dobbs Industies $40,000 on August 1, 2017, accepting a 9-mon note. (a) What is the total amount of interest that Dobbs will owe to Yang Company? (b) When Yang prepares its financial statements on December 31, 2017, what adjusting journal entry wil it need to make? Assume no interests accruals have been recorded since August 1, 2017. (c) What entry will Yang make to record the collection of the note and interest at its maturity date? Assume no adjusting entries have been made since December 31, 2017 On April 5 Diana's Boutique accepted a Visa card for a $600 purchase. Visa charges a 2% service fee. The entry to record this transaction would be? 34 A company sells $900,000 of accounts receivable to a factor for cash. The factor charges a 3% service charge. The entry to record the sale would be? 35 36. The following totals for the month of April were taken from the payroll records of Knoll Company. Total salaries FICA taxes withheld Income taxes withheld $60,000 4,590 12,500 The journal entry to record the monthly payroll accrual on April 30 would be?

Answer 1

33) a) Total interest = 40000*12%*9/12 = 3600

b) Journal entry :

Date	accounts & explanation	debit	credit
Dec 31	Interest receivable (40000*12%*5/12)	2000
	Interest revenue		2000
	(To record accured interest)

c) Journal entry :

Date	accounts & explanation	debit	credit
May 1	Cash	43600
	Interest receivable		2000
	Interest revenue		1600
	Notes receivable		40000
	(To record collection of note)