(Accounts and Notes Payable) The following are selected 2017 transactions of Sean Astin Corporation.Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system.Oct. 1 Issued a $50,000, 12-month, 8% note to Encino in payment of account.Oct. 1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note.Instructions(a) Prepare journal entries for the selected transactions above.(b) Prepare adjusting entries at December 31.(c) Compute the total net liability to be reported on the December 31 balance sheet for:(1) The interest-bearing note.(2) The zero-interest-bearing note.

(Accounts and Notes Payable) The following are selected 2017 transactions of Sean Astin Corporation.Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system.Oct. 1 Issued a $50,000, 12-month, 8% note to Encino in payment of account.Oct. 1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note.Instructions(a) Prepare journal entries for the selected transactions above.(b) Prepare adjusting entries at December 31.(c) Compute the total net liability to be reported on the December 31 balance sheet for:(1) The interest-bearing note.(2) The zero-interest-bearing note.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 14RE: On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank....

See similar textbooks

Similar questions

Ehler Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Ehler had the following transactions related to notes payable. Sept. 1 Issued a $12,000 note to Pippen to purchase inventory. The 3-month note payable bears interest of 6% and is due December 1. (Ehler uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Oct. 1 Issued a $16,500, 8%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note. Nov. 1 Issued a $26,000 note and paid $8,000 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months. Nov. 30 Recorded accrued interest for the Pippen note,…
The following are selected 2023 transactions of Whispering Winds Corporation. Purchased inventory from Flint Ltd. on account for $42,800. Whispering Winds uses a periodic inventory system. Issued a $42,800, 12-month, 8% note to Flint in payment of Whispering Winds's account. Borrowed $75,300 from the bank by signing a 12-month, non-interest-bearing $80,300 note. Prepare the journal entries for the payment of the notes at maturity, assuming the Whispering Winds uses reversing entries. (Show the reversing entries at January 1, 2024.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Sept. 1 Oct. 1 1 Date Oct. 1 v Oct. 1 Oct. 1 Jan, 1 Oct. 1 V Account Titles and Explanation Flint Note Purchases Accounts Payable Cash Interest Expense Notes…
Sarasota Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Sarasota had the following transactions related to notes payable. Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 9% and is due December 1. (Sarasota uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Oct. 1 Issued a $22,800, 10%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note. Nov. 1 Issued a $27,600 note and paid $8,100 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months. Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank…
The following are selected 2019 transactions of Kelly Company a. October 1: Purchased inventory from Sid Corporation on account $100,000. Kelly records purchases gross and uses a periodic system. b. November 1: Issued a $60,000 6-month 10% note to Sid in payment of account. c. November 1: Borrowed $80,000 from FB Bank by signing a 15 month, zero interest bearing $110,000 note. Required: 1. Prepare the journal entries for the transactions above. 2. Prepare the adjusting entries as at December 2019
The following is sample list of the Speiran Company's transactions completed during 2019. The company's fiscal year ends on December 31. Jan. 8 Purchased merchandise for resale on account. The invoice amount was $14,720; assume a perpetual inventory system. 17 Paid January 8 invoice. Apr. 1 Borrowed $72,000 from Lowell Bank for general use; signed a 12-month, 8% annual interest-bearing note for the money. May 1 Rented office space in one of Speiran Company's buildings to another company and collected six months' rent in advance amounting to $27,000. Required: 1. Prepare journal entries for each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Banksia Company completed the following transactions during 2018-2019. The annual accounting period ends 30 June 2019. a) Purchased inventory on credit at cost of AUD 16,800; perpetual inventory system is used. Received a customer deposit of AUD 18,000 from ABC Ltd for services to be rendered in the b) future. c) Borrowed AUD 900,000 from the bank on 1 March 2019 by giving the bank a six-month, 9% interest bearing note payable. Performed AUD 8,000 of the services paid for by ABC Ltd; the rest will be rendered in August d) 2019. Received the electricity bill for AUD 24,200, which will be paid in early July. On 1 June 2019 received rent in advance of AUD 21,600 from XYZ Ltd for a 3 month lease of premises from 1 June until 31 August 2019. Wages accrued in the last weekly payroll amounted to AUD 23,000 and will be paid on 5 July f) 2019. Required: 1) Prepare the journal entries for each of these transactions. 2) Prepare all adjusting entries required on 30 June 2019.
Pharoah Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2022, Pharoah had the following transactions related to notes payable. Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 6% and is due December 1. (Pharoah uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Oct. 1 Issued a $21,600, 8%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note. Nov. 1 Issued a $27,600 note and paid $9,200 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 7% and matures in 12 months. Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank…
Pharoah Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2022, Pharoah had the following transactions related to notes payable. Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 6% and is due December 1. (Pharoah uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Oct. 1 Issued a $21,600, 8%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note. Nov. 1 Issued a $27,600 note and paid $9,200 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 7% and matures in 12 months. Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank…
Blossom Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2022, Blossom had the following transactions related to notes payable. Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 8% and is due December 1. (Blossom uses a perpetual inventory system.) Sept. 30 Recorded accrued interest for the Pippen note. Oct. 1 Issued a $21,600, 9%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note. Nov. 1 Issued a $24,000 note and paid $9,000 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 8% and matures in 12 months. Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note.…
The following items were selected from among the transactions completed by Shin Co. during the current year: Jan. 10 Purchased merchandise on account from Beckham Co., $420,000, terms n/30. Feb. 9 Issued a 30-day, 6% note for $420,000 to Beckham Co., on account. Mar. 11 Paid Beckham Co. the amount owed on the note of February 9. May 1 Borrowed $240,000 from Verity Bank, issuing a 45-day, 5% note. June 1 Purchased tools by issuing a $312,000, 60-day note to Rassmuessen Co., which discounted the note at the rate of 5%. 15 Paid Verity Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day, 7% note for $240,000. (Journalize both the debit and credit to the notes payable account.) July 30 Paid Verity Bank the amount due on the note of June 15. 30 Paid Rassmuessen Co. the amount due on the note of June 1. Dec. 1 Purchased office equipment from Lambert Co. for $700,500 paying $160,500 and issuing a series of ten 5% notes for $54,000…
Banksia Company completed the following transactions during 2018-2019. The annual accounting period ends 30 June 2019. a) b) Purchased inventory on credit at cost of AUD 16,800; perpetual inventory system is used. Received a customer deposit of AUD 18,000 from ABC Ltd for services to be rendered in the future. c) Borrowed AUD 900,000 from the bank on 1 March 2019 by giving the bank a six-month, 9% interest bearing note payable. Performed AUD 8,000 of the services paid for by ABC Ltd; the rest will be rendered in August d) 2019. e) f) Received the electricity bill for AUD 24,200, which will be paid in early July. On 1 June 2019 received rent in advance of AUD 21,600 from XYZ Ltd for a 3 month lease of premises from 1 June until 31 August 2019. Wages accrued in the last weekly payroll amounted to AUD 23,000 and will be paid on 5 July 8) 2019. Required: 1) Prepare the journal entries for each of these transactions. 2) Prepare all adjusting entries required on 30 June 2019
(Basic Note and Accounts Receivable Transactions)Part 1: On July 1, 2017, Wallace Company, a calendar-year company, sold special-order merchandise on credit and received inreturn an interest-bearing note receivable from the customer. Wallace Company will receive interest at the prevailing rate for anote of this type. Both the principal and interest are due in one lump sum on June 30, 2018. InstructionsWhen should Wallace Company report interest revenue from the note receivable? Discuss the rationale for your answer Part 2: On December 31, 2017, Wallace Company had significant amounts of accounts receivable as a result of credit sales to its customers. Wallace uses the allowance method based on credit sales to estimate bad debts. Past experience indicates a reliable estimate of uncollectible accounts can be developed based on an aging analysis of receivable balances. This pattern is expected to continue. Instructions(a) Discuss the rationale for using the allowance method based on the…