Horngren's Accounting (11th Edition)
11th Edition
ISBN: 9780133856781
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem S9.11SE
Accruing interest revenue and recording collection of a note
On December 1, Kole Company accepted a 120-day, 6%, $17,000 note receivable from J. Peterman in exchange for his
Requirements
- Journalize the transaction on December 1.
- Journalize the
adjusting entry needed on December 31 to accrue interest revenue. - Journalize the collection of the principal and interest at maturity. Specify the date.
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Prefix Supply Company received a 60-day, 5% note for $57,000 dated July 12 from a customer on account.
Required:
a. Determine the due date of the note.
b. Determine the maturity value of the note. Assume a 360-day year.
c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
a. Determine the due date of the note.
September 10
b. Determine the maturity value of the note. Assume a 360-day year. (Note: Round computations to the nearest whole dollar.)
c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
Prefix Supply Company received a 60-day, 4% note for $46,000 dated July 12 from a customer on account.
Required:
a. Determine the due date of the note.
b. Determine the maturity value of the note. Assume a 360-day year.
c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Prefix Supply Company
General Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
129
Allowance for Doubtful Accounts
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY…
Accounting for notes receivable and accruing interest
Carley Realty loaned money and received the following notes during 2018.
Determine the maturity date and maturity value of each note.
Journalize the entries to establish each Note Receivable and to record collection of principal and interest at maturity. Include a single adjusting entry on December 31, 2018, the fiscal year-end, to record accrued interest revenue on any applicable note. Explanations are not required. Round to the nearest dollar.
Chapter 9 Solutions
Horngren's Accounting (11th Edition)
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expensearrow_forwardACCRUED INTEREST RECEIVABLE The following is a list of outstanding notes receivable as of December 31, 20--: REQUIRED 1. Compute the accrued interest at the end of the year. 2. Prepare the adjusting entry in the general journal.arrow_forwardNotes 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.)arrow_forward
- Use information from EA10. Compute the interest expense due when Barkers honors the note. Show the journal entry to recognize payment of the short-term note on December 4.arrow_forwardArvan 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.arrow_forwardBelow are the transactions related to notes receivable activity for Barton Corporation. Record each transaction in the journal provided. Enter the date of the last transaction. 2020 13-Nov Accepted a $40,000, 90-day, 6% note from a customer in exchange for their past due accounts receivable balance 31-Dec Made an entry to accrue the accrued interest earned on the Nov 13 note 2021 11-Feb Received payment for the principal and interest on the note dated November 13 22-Apr Accepted a $20,000, 45-day, 5% note from a customer in exchange for consulting fees provided ??? Received payment for the principal and interest on the note dated April 22…arrow_forward
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