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In: Accounting

Entries for notes payable Bennett Enterprises issues a $648,000, 45-day, 6%, note to Spectrum Industries for...

Entries for notes payable

Bennett Enterprises issues a $648,000, 45-day, 6%, note to Spectrum Industries for merchandise inventory.

Assume a 360-day year. If required, round your answers to the nearest dollar.If an amount box does not require an entry, leave it blank.

a. Journalize Bennett Enterprises’ entries to record:

  1. the issuance of the note.
  2. the payment of the note at maturity.
1.
2.

b. Journalize Spectrum Industries’ entries to record:

  1. the receipt of the note.
  2. the receipt of the payment of the note at maturity.
1.
2.
  

Solutions

Expert Solution

Bennet Enterprises
Journal entries
Date accounts title and explanation Debit $ Credit $
a. Merchandise inventory 6,48,000
    Notes payable 6,48,000
(for notes issued for purchased)
b. Notes payable 6,48,000
Interest expense (648,000*6%*45/360) 4,860
      Cash account 6,52,860
(for cash paid for notes)
Spectrum
Journal entries
Date accounts title and explanation Debit $ Credit $
a. Notes receivable 6,48,000
     Sales revenue 6,48,000
(for notes received for sale)
b. Cash account 6,52,860
       Notes receivable 6,48,000
       Inerest revenue (648000*6%*45/360) 4,860
(for cash received for notes)

ekkarill92 answered 2 years ago
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