Question
In: Accounting
On 12-31-19, J sold some inventory to T. J accepted from T a $4,000,000, 2% note...
On 12-31-19, J sold some inventory to T. J accepted from T a $4,000,000, 2% note receivable. J will collect interest on the note every 12-31 starting 12-31-20. J will collect the note principle in full on 12-31-21. At the time J sold the inventory, the market rate on similar notes was 3%. The cost of the inventory J sold was $500,000. Prepare the entries J should make on 12-31-19, 12-31-20, and 12-31-21
Solutions
Expert Solution
| Solution : | ||||
| JOURNAL ENTRIES IN THE BOOKS OF J | ||||
| Journal Entries | ||||
| Sr. No. | Date | Account Title | Debit | Credit |
| 1 | 12-31-19 | Note Receivable | $ 4,000,000 | |
| Sales Revenue | $ 4,000,000 | |||
| 2 | 12-31-19 | Cost of Goods Sold | $ 500,000 | |
| Merchandise Inventory | $ 500,000 | |||
| 3 | 12-31-20 | Cash ($ 4,000,000 X 2%) | $ 80,000 | |
| Interest Revenue | $ 80,000 | |||
| 4 | 12-31-21 | Cash | $ 4,080,000 | |
| Interest Revenue | $ 80,000 | |||
| Note Receivable | $ 4,000,000 | |||
ekkarill92 answered 1 year agoRelated Solutions
On 12-31-19, J sold some inventory to T. J accepted from T a $4,000,000, 2% note...
On 12-31-19, J sold some inventory to T. J accepted from T a
$4,000,000, 2% note receivable. J will collect interest on the note
every 12-31 starting 12-31-20. J will collect the note principle in
full on 12-31-21. At the time J sold the inventory, the market rate
on similar notes was 3%. The cost of the inventory J sold was
$500,000. Prepare the entries J should make on 12-31-19, 12-31-20,
and 12-31-21.
20. XYZ Merchandising uses a periodic inventory system. The balance in the inventory account on 12/31/19...
20. XYZ Merchandising uses a periodic inventory system. The
balance in the inventory account on 12/31/19 is $230,000. They
report the following accounts and balances on 12/31/19: Debit
Credit Cash $109,000 Account Receivable 92,000 Allowance for
Doubtful Accounts 1,000 Inventory balance on 1/1/19 223,000
Purchases 310,000 Equipment 115,000 Accumulated Depreciation 20,000
Account Payable 95,000 Common Stock 90,000 Retained Earnings 1/1/19
290,000 Sale Revenue 390,000 Operating Expenses 37,000 Additional
Information: The business has not recorded the annual depreciation
for 2019 or...
The following data pertain to the Northwest Co." Material inventory, 1/1/19 $20,000 Material inventory, 12/31/19. 30,000...
The following data pertain to the Northwest Co."
Material inventory, 1/1/19 $20,000
Material inventory, 12/31/19. 30,000
Material purchases. 140,000
work in process inventory, 1/1/19. 40,000
work in process inventory, 12/31/19. 34,500
direct labor. 162,000
manufacturing overhead. 143,000
finished goods inventory, 1/1/19. 90,000
finished goods inventory, 12/31/19. 74,000
Cost of goods sold should be:
A. $456,500
B. $326,500
C. $486,500
D. $530,500
ardinals Co purchased some equipment on 12/31/18 by issuing a $5,500,000, 2%, 5-year note calling for...
ardinals Co purchased some equipment on 12/31/18 by issuing a
$5,500,000, 2%, 5-year note calling for 5 equal annual payments,
the first of which to be made on 12/31/19. The appropriate rate of
interest for this type of activity is 10%. Since this is a below
market interest note, the net method of recording is utilized.
** REQUIRED:
1) Determine the following items:
a) amount of the annual payment. 1166871
b) amount debited to the equipment account. 4423363
c) amount...
Uniform Supply accepted a $5,600, 90-day, 12% note from Tracy Janitorial on October 17. If the...
Uniform Supply accepted a $5,600, 90-day, 12% note from Tracy
Janitorial on October 17. If the note is dishonored, but Uniform
Supply intends to continue collection efforts, what entry should
Uniform Supply make on January 15 of the next year? (Assume no
reversing entries are made.) (Use 360 days a
year.)
Debit Notes Receivable $5,600; debit Interest Receivable $168;
credit Sales $5,768.
Debit Accounts Receivable $5,768; credit Interest Revenue $28;
credit Interest Receivable $140, credit Notes Receivable
$5,600.
Debit Cash...
On 12/31/19 we sign a 3-year note receivable for $50,000 in payment for services that we...
On 12/31/19 we sign a 3-year note receivable for $50,000 in
payment for services that we provided to a client. This amount does
not include interest. Annual year-end payments $20,106 begin on
12/31/20. The payments include both principal and interest at
10%.
Prepare an amortization table
Prepare the journal entry for 12/31/19
Prepare the journal entry for 12/31/20
Prepare the journal entry for 1/1/21
Prepare the journal entry for 1/1/22
On 12/31/19 we sign a 3-year note receivable for $50,000 in payment for services that we...
On 12/31/19 we sign a 3-year note receivable for $50,000 in
payment for services that we provided to a client. This amount does
not include interest. Annual year-end payments $20,106 begin on
12/31/20. The payments include both principal and interest at
10%.
Prepare an amortization table
Prepare the journal entry for 12/31/19
Prepare the journal entry for 12/31/20
Prepare the journal entry for 1/1/21
Prepare the journal entry for 1/1/22
Jim sold a car and accepted a note promising cash flows of $1,000 at the end...
Jim
sold a car and accepted a note promising cash flows of $1,000 at
the end of Year 1, and 2,000 at the end of years 2, 3 and 4 as his
payment. What was the effective price he received for the car,
assuming an interest rate of 8.50%?
Your answer should be between 4,715.00 and 6,525.00. Round to
2 decimal places.
The following information pertains to Hague Corp.’s Year 2 cost of goods sold: Inventory, 12/31/Year 1...
The following information pertains to Hague Corp.’s Year 2 cost
of goods sold:
Inventory, 12/31/Year 1
Year 2 purchases
Year 2 write-off of obsolete inventory Inventory, 12/31/Year 2
$180,000 248,000 68,000 60,000
The inventory written off became obsolete because of an
unexpected and unusual technological advance by a competitor. In
its Year 2 income statement, what amount should Hague report as
cost of goods sold?
A. $436,000 B. $368,000 C. $300,000 D. $248,000
[2] During December of Year 1, Nile...
You sold your motorcycle and accepted a note with the following cash flow stream as your...
You sold your motorcycle and accepted a note with the following
cash flow stream as your payment. It pays you nothing now, $520
next year, and $5,000 for the three years after that (Years 2-4).
What was the effective price you received for the motorcycle
assuming an nominal interest rate of 9.1%? Show your answer to the
nearest $.01. Do not use the $ or , signs in your answer.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Engine Cycles a. Write a description of an 'engine cycle'. Use figures, grabs and/or image to...
- orley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these...
- You are creating an enhanced entity relationship model for a campus information system. A junior team...
- The following time series shows the sales of a particular product over the past 12 months....
- Would the voltage of a battery in circuit be larger or smaller than the voltage of...
- The current asset section of the Excalibur Tire Company’s balance sheet consists of cash, marketable securities,...
- Part 1: Explain and provide a real life business example for equivalent units. Explain the importance...
ADVERTISEMENT