Success Company
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Free InquiryOn February 1, 2016, Success Company accepted a six-month note receivable as an extention of time for a balance of $15,000 owing from Climbing Company. The note has an annual interest rate of 4%. Success Company has a June 30 year end.
Required a) Prepare the appropriate journal entry for Success Company when the note is signed.
Do not enter dollar signs or commas in the input boxes.
Date |
Account Title and Explanation |
Debit |
Credit |
Feb 1 |
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
|
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
||
To convert accounts receivable to a note |
b) Prepare the appropriate journal entry for the year-end adjustment.
Round your answers to 2 decimal places.
Date |
Account Title and Explanation |
Debit |
Credit |
Jun 30 |
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
|
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
||
To accrue interest at year end |
c) Climbing Company honoured the note. Prepare the appropriate journal entry upon payment.
Round your answers to 2 decimal places. Enter credit entries in alphabetical order.
Date |
Account Title and Explanation |
Debit |
Credit |
Aug 1 |
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
|
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
||
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
||
AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseAllowance for Doubtful AccountsBad Debt ExpenseCashInsurance ExpenseInterest ExpenseInterest PayableInterest ReceivableInterest RevenueNotes PayableNotes ReceivablePrepaid InsurancePrepaid RentPrepaid Services |
Answer |
||
To receive note at maturity |
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