Question. During 2024, Royal Co. borrowed cash from another company by issuing notes payable as follows: 1. July 1, 2024, issued an 5 month, 7% note for $65,000. Interest and principal are payable at maturity. 2. November 1, 2024, issued a 3 month, 5% note for $40,200. Interest is payable monthly on the first day of the month. Principal is payable at maturity Royal has a December 31 fiscal year end and prepares adjusting entries on an annual basis. b) Prepare the necessary interest payment transactions for Royal in 2024 and 2025. Prepare separate adjusting entries for each note. Give an explanation for each entry and date used for a better understanding please.
Question. During 2024, Royal Co. borrowed cash from another company by issuing notes payable as follows: 1. July 1, 2024, issued an 5 month, 7% note for $65,000. Interest and principal are payable at maturity. 2. November 1, 2024, issued a 3 month, 5% note for $40,200. Interest is payable monthly on the first day of the month. Principal is payable at maturity Royal has a December 31 fiscal year end and prepares adjusting entries on an annual basis. b) Prepare the necessary interest payment transactions for Royal in 2024 and 2025. Prepare separate adjusting entries for each note. Give an explanation for each entry and date used for a better understanding please.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...
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Question. During 2024, Royal Co. borrowed cash from another company by issuing notes payable as follows:
1. July 1, 2024, issued an 5 month, 7% note for $65,000. Interest and principal are payable at maturity.
2. November 1, 2024, issued a 3 month, 5% note for $40,200. Interest is payable monthly on the first day of the month. Principal is payable at maturity
Royal has a December 31 fiscal year end and prepares
b) Prepare the necessary interest payment transactions for Royal in 2024 and 2025. Prepare separate adjusting entries for each note.
Give an explanation for each entry and date used for a better understanding please.
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