ABC company issued a promissory note to DEF bank. Details from the promissory note as follows: Date of note: November 15,2020 Term of note: 6 months Principal: $120,000 Interest rate: 12% Interest was not discounted on the date of note issuance Questions: 1) What is the type of adjustment? 2) Adjusting entry on December 31 3) Should the adjustment was not made, what would be the effect on net income?
Q: Sslon) Oriole Supply Co. has the following transactions related to notes receivable during the last…
A: Interest on Lopez's note relates to 2020 for 2 months and to 2021 for 10 months. So in 2021:…
Q: On January 1, 2020, Victoria Company borrowed ₱600,000 8%, noninterest-bearing note due in four…
A: solution : given face value of note = 600,000 present value of note =441000 date of issue =…
Q: On 1st Jan 2020 Suntop LLC has Opening accounts receivable for RO 8000. During the year 2020 amount…
A: The amount of money due to a company for goods or services delivered or utilized but not yet paid…
Q: On December 1, 2020, Lieza Mae assigned on a non notification basis accounts receivable of…
A: Current liability represents the obligation that has to be paid within a year.
Q: On December 31, 2021, Andy Inc. has a debit balance of $1,500 for the Allowance for Uncollectible…
A: * As per Bartleby policy, if multiple questions are asked then answer first only. Calculation of…
Q: Ervin Company uses the allowance method to account for uncollectible accounts receivable. Bad debt…
A: The allowance for doubtful accounts is created to record estimated bad debt expense for the period.
Q: On April 1, 2020, Shalimar Company discounted with recourse a 9-month, 10% note dated January 1,…
A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…
Q: At the end of its first year of operations, December 31, 2020, ASHOPEE Company had accounts…
A: Allowance for uncollectible accounts is considered a contra asset account. It is prepared against…
Q: What amount should be reported as doubtful accounts expense in the income statement for 2020? From…
A: The management estimates a portion of dues remain uncollectible, so they prefer to record that…
Q: On January 1, 2020, Ocean Company's Allowance for Bad debts had a credit balance of P 120,000.…
A: Adjusted balance of Allowance for Bad Debts = Beginning Allowance for Bad debts balance - Accounts…
Q: The F Company uses the allowance method is used to account for uncollectible receivables. It had the…
A: Receivables, loans, and other obligations that are likely to be paid are referred to as…
Q: Nissan Inc. prepared an aging of its accounts receivable at December 31,2020 and determined that the…
A:
Q: On December 31, 2020, Sunland Co. estimated that 4% of its net accounts receivable of $488,600 will…
A: The allowance for doubtful accounts is established to record the estimated bad debt expenses for the…
Q: ABC Company has an allowance for uncollectible accounts balance of P34,000 at January 1, 2020.…
A:
Q: What should be the balance of the Discount on Notes Payable account on the books of ABC Company at…
A: Note payable- A promissory note or written agreement is referred to as a note payable. The…
Q: Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in…
A: Given, Adjusted Allowance of Uncollectible Accounts, 2020 = $12,000 Credit Unadjusted Allowance of…
Q: . Prepare the journal entries of Clear Glass to record the preceding information, the related…
A: Discounting the note implies, the realization of a note amount for a discount before the due date of…
Q: On November 1, 2021, Calexico Trading accepted a 90-day, 8% P2,000,000 note from ABC Co. Calexico…
A: Notes Payable / Receivable The purpose issuing the Notes receivable / Notes payable to collect the…
Q: At the end of its first year of operations, on December 31, 2020, Metlock Inc. reported the…
A: Accounts Receivables:- These are the current assets of the company which has to receive within a…
Q: On November 16, 2019, Clear Glass Company borrowed $20,000 from First American Bank by issuing a…
A: The calculation as,
Q: On April 1, 2020, Aljean Company discounted with recourse a 9-month, 10% note dated January 1, 2020…
A: The amount received from the note receivable discounting on April, 1 2020: (P) Principal…
Q: ts Accounts Receivable at December 31, 2020 and determined that the estimated uncollectibles on that…
A: Accounts written off during current year = Opening balance of allowance for doubtful debt + Bad debt…
Q: Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in…
A: Bad debt expense for 2021 = (gross accounts receivable x 10%) + Debit balance of allowance for…
Q: Upham Company’s June 30, 2019, balance sheet included the following information: Upham Company…
A: The note receivable could be a formal promissory note issued by the creator or issuer to the payee.…
Q: On October 1, 2021, Home Company issued to Security Bank a P6,000,000, 8-month, noninterest-bearing…
A: Note payable: Note payable is a current liability reported in the company's balance sheet at the…
Q: Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in…
A: 1. Balance in gross accounts receivable as of 31/12/2020 = Ending Allowance for uncollectible…
Q: On December 31, 2019, Cha Corporation had accounts receivable of P6,000,000, net of the related…
A: Balance for Allowance for doubtful accounts = Total Bad debt expense - Amount wrote off = P900000 -…
Q: and the related allowance for uncollectible accounts were P500,000 and P45,000, respectively. An…
A: Solution: net realizable value of accounts receivable is the value which is arrived at by deduction…
Q: A Corp. provided the following information regarding its Notes Receivable at December 31, 2021:…
A: Note Gross carrying amount Lifetime expected credit losses 12-month expected credit losses Credit…
Q: ABC Company received a ten-month, $18,000, 4% note from XYZ Corporation on April 1, 2020 to replace…
A: First understand the Journal Entry on Dec 31, 2020 Date General Journal Debit Credit Dec 31…
Q: ABC Company received a ten-month, $18,000, 4% note from XYZ Corporation on April 1, 2020 to replace…
A: Formula: Interest amount = Principal amount xx interest rate Multiplying principal amount with…
Q: Mar Company provides the following information on December 31, 2020: Income taxes withheld from…
A: Current liabilities are those types of obligations that must be fulfilled within a year. Creditors,…
Q: Johnson Company calculates its allowance for uncollectible accounts as 20% of its ending balance in…
A: 1) The balance in gross accounts receivable is $105,000.
Q: Pina Colada Corp. has the following transactions related to notes receivable during the last 2…
A: Introduction: A journal entry is used in a company's accounting records to disclose a business…
Q: Philip Company has a P200,000, 9%, 120-day note receivable outstanding on December 31. The note is…
A: Here in this question, we are required to pass journal entry for the interest accrual. When any…
Q: The following information was taken from the accounts receivable records of Sarasota Corporation as…
A: Calculation of Estimated Uncollectibles Particular Outstanding Balance Percentage Estimated to be…
Q: Pharoah Ltd. borrowed ¥63,600,000 on November 1, 2021, by signing a ¥65,031,000, 3-month, zero-…
A: Formula: Discount on bond = Face value of bond - borrowed amount
Q: Whispering Supply Co. has the following transactions related to notes receivable during the last 2…
A: .Journal entries are recorded to record financial transactions in the books of accounts. These…
Q: Nissan Inc. prepared an aging of its accounts receivable at December 31,2020 and determined that the…
A: Bad debts are the receivables that the company expects to be bad and irrecoverable. These are…
Q: ds to Ralph Kremer, Inc., receiving a $ 36,000, 90-day, 6% note. 16 Received a $ 21,600, 180…
A: A journal entry is a record of a commercial transaction in an organization's accounting system.When…
Q: On October 1, 2020, Shamrock, Inc. assigns $1,160,700 of its accounts receivable to Bridgeport…
A:
Q: On April 1, 2020, ABC Company discounted with recourse a 9-month, 10% note dated January 1, 2020…
A: The calculation of note interest and maturity value of note has been made as follows: Note…
Q: Ayayai Supply Co. has the following transactions related to notes receivable during the last 2…
A: A journal entry is a record of a company's financial activities kept in its accounting books. The…
Q: On December 31, 2020, Novak Corp. estimated that 4% of its net accounts receivable of $414,400 will…
A: given that, accounts recievables as on 31 dec 2020 = $414400 estimated bad debts = 4% of accounts…
Q: Swifty Company had the following select transactions. Apr. 1, 2020 Accepted Goodwin Company’s…
A: Journal entries refers to the systematic documentation of the financial transactions of a company in…
Q: On January 1, 2019, an entity was indebted to a bank under a P4,800,000, 10% loan. The loan was…
A: Impairment loss is when the carrying amount is more than the recoverable amount. Every entity should…
Q: Clancy Co. accepted a two-year noninterest-bearing note for $1,166,400 on January 1, 2020. The note…
A:
Q: ,000 on November 1, 2020. On the same date, the company issued a 60 day, 12% promissory note to the…
A: When the interest expense is accrued for the period, it becomes an obligation and is transferred to…
Q: Bramble Supply Co. has the following transactions related to notes receivable during the last 2…
A: Calculation of Interest Revenue on December 31: Notes Receivable - Manny Lopez ($13,200 * 10% *…
ABC company issued a promissory note to DEF bank. Details from the promissory note as follows:
Date of note: November 15,2020
Term of note: 6 months
Principal: $120,000
Interest rate: 12%
Interest was not discounted on the date of note issuance
Questions:
1) What is the type of adjustment?
2)
3) Should the adjustment was not made, what would be the effect on net income?
Step by step
Solved in 4 steps
- On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120 in its accounts receivable. Additionally, Karras had a credit balance in its allowance for doubtful accounts of 4,350 and 9,420 at the beginning and end of the year, respectively. During the year, Karras made credit sales of 1,530,000, collected receivables in the amount of 1,445,700, and recorded bad debt expense of 83, 750. Required: Next Level Compute the amount of accounts receivable that Karras wrote off during the year and the amount of accounts receivable at the beginning of the year.Non-Interest-Bearing Notes Payable On November 16, 2019, Clear Glass Company borrowed 20,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items Would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Companys effective interest rate?
- 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 ExpenseProblem: ABC Company issued a promissory note to RCBC Bank. Details from the promissory note are as follows: Date of note: November 1, 2020 Term of note: 180 days Principal: P120,000 Interest rate: 12% Determine the following: 1. What is the account to be credited on the adjusting entry on December 31, 2020? 2. How much is the amount to be credited on December 31, 2020? 3. How much is the total interest expense for the full term of the note.Erza Company has a P180,000, 10%, 90-day note receivable outstanding at December 31. The note is dated December 1, 2020. The appropriate adjusting entry is made to record accrued interest on the note at year-end. What is the correct adjusting entry on December 31 of the current year? Debit Interest Revenue and credit Interest Receivable, P4,500 Debit Interest Receivable and credit Interest Revenue, P1,500 Debit Interest Receivable and credit Interest Revenue, P4,500 Debit Interest Revenue and credit Interest Receivable, P1,500
- ABC Company received a ten-month, $18,000, 4% note from XYZ Corporation on April 1, 2020 to replace an accounts receivable. Assuming all necessary adjusting entries were made at year end, December 31, 2020, the entry ABC makes on the maturity date would include a: credit to interest receivable for $540. credit to note receivable for $18,600 credit to interest revenue for $600 A. В. С. D. debit to interest revenue for $60 Е. credit to interest revenue for $720On March 11, 2022, FDNÁCCT Services issued to a lender a 120-day, non- interest-bearing P400,000 note for a down payment to purchase a delivery van. When was the maturity date of the note? Enter your answer as month/day/year. Examples: April 2, 2022 as 04/02/2022 [no spaces in between the /] May 15, 2022 as 05/15/2022 [no spaces in between the /]On November 16, 2019, Clear Glass Company borrowed $24,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Company’s effective interest rate?
- On November 16, 2019, Clear Glass Company borrowed $20,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry,and payment of the note at maturity. 2. Show how the preceding items would be reported On the December 31, 2019, balance sheet. 3. Next Level what is Clear Glass Company’s effective interest rate?Pina Colada Corp. has the following transactions related to notes receivable during the last 2 months of 2020. The company does not make entries to accrue interest except at December 31. Nov. 1 Dec 11 16 31 Loaned $12,600 cash to Manny Lopez on a 12 month, 10% note. Sold goods to Ralph Kremer, Inc., receiving a $24,750, 90-day, 8% note. Received a $22,800, 180 day, 10% note in exchange for Joe Fernetti's outstanding accounts receivable. Accrued interest revenue on all notes receivable. Journalize the transactions for Pina Colada Corp. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Use 360 days for calculation. Round answers to 0 decimal places, eg. 5,275. Record journal entries in the order presented in the problem.) Date > > > eTextbook and Media List of Accounts Date Account Titles and Explanation V Record the collection of the Lopez note at its maturity in 2021. (Credit account titles are automatically indented when amount is…Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. 0-30 dayspast due 31-90 dayspast due Over 90 dayspast due Accounts receivable amount $52,000 $31,000 $17,000 Percent uncollectible 8% 15% 30% Total per category ? ? ? Total uncollectible ? To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. 0-60 dayspast due 61-120 dayspast due Over 120 dayspast due Accounts receivable Amount $82,000 $15,000 $8,000 Percent uncollectible 8% 15% 30% Total per category ? ? ? Total uncollectible ? Complete the following. A. Complete each table by filling in the blanks. 0-30 dayspast due 31-90 dayspast due Over 90 dayspast due Accounts receivable amount $52,000…