Keesha Company borrows $250,000 cash on December 1 of the current year by signing a 120-day, 11%, $250,000note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and thefollowing year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest onDecember 31, and (c) payment of the note at maturity.

Part 2: Explanation:1. To find the maturity date, we add the number of days in the note (120 days)…

Answered: Keesha Company borrows $250,000 cash on…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 14EA: Arvan Patel is a customer of Banks Hardware Store. For Mr. Patels latest purchase on January 1,...

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Arvan Patel is a customer of Banks Hardware Store. For Mr. Patels latest purchase on January 1, 2018, Banks Hardware issues a note with a principal amount of $480,000, 13% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Banks Hardware Store for the following transactions. A. Note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019.
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
Notes Receivable Transactions The following notes receivable transactions occurred for Harris Company during the last three months of the current year. (Assume all notes are dated the day the transaction occurred.) Required: 1. Prepare the journal entries to record the preceding note transactions and the necessary adjusting entries on December 31. (Assume that Harris does not normally sell its notes and uses a 360-day year for the purpose of computing interest. Round all calculations to the nearest penny.) 2. Show how Harris notes receivable would be disclosed on the December 31 balance sheet. (Assume these are the only note transactions encountered by Harris during the year.)
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
Keesha Company borrows $270,000 cash on November 1 of the current year by signing a 180-day, 11%, $270,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Principal Rate (%) Time Total interest What is the amount of interest expense in the current year and the following year from this note? Note: Use 360 days a year. Do not round intermediate calculations and round final answers to the nearest whole dollar. h Req 4 Total through maturity Interest Expense Current Year
Keesha Company borrows $175,000 cash on November 1 of the current year by signing a 180-day, 9%, $175,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity. Complete this question by entering your answers in the tabs below. Req 4 On what date does this note mature? (Assume that February has 28 days.) On what date does this note mature? Req 1 Req 2 and 3 Req 1 Req 2 and 3 >
Keesha Company borrows $280,000 cash on November 1 of the current year by signing a 150-day, 8%, $280,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity.

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