Accompanying the bank statement was a credit memo for a short-term note collected by the bank...

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

		debit Notes Receivable; credit Cash
		debit Cash; credit Miscellaneous Income
		debit Cash; credit Notes Receivable and Interest Revenue
		debit Accounts Receivable; credit Cash

Solutions

Expert Solution

The answer is option third - debit Cash; credit Notes Receivable and Interest Revenue.

When a bank statement show a credit memo for note collected by the bank for the customer, it means cash is collected by the bank for the notes receivable. In this case cash should be debited because cash is received by the bank against note receivable so Note receivable should be credited along with interest revenue on the note.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

1. Accompanying the bank statement was a credit memo for a short-term note collected by the...

1. Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts? a.debit Cash; credit Notes Receivable and Interest Revenue b.debit Notes Receivable; credit Cash c.debit Accounts Receivable; credit Cash d.debit Cash; credit Miscellaneous Income 2. Use the information below to answer the following question. The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at...

Which of the following is typically the largest source of short-term credit for a firm? bank...

Which of the following is typically the largest source of short-term credit for a firm? bank loans trade Credit factoring asset-backed public offerings

a. What is short-term credit, and what are the major sources of credit? b Is there...

a. What is short-term credit, and what are the major sources of credit? b Is there a cost to accrued liabilities? Fully explain your rationale. c. What control do the company's have over accrued liabilities? d. SPP is considering using secured short-term financing. What is a secured loan? What types of current assets can be used to secure the loans? e. What are the differences between pledging receivables and factoring receivables?

5a. Trapezoid Company signed a short-term, one year, note to borrow $10,000 from Cash Bank on...

5a. Trapezoid Company signed a short-term, one year, note to borrow $10,000 from Cash Bank on April 1, 2017. The interest on the note was 12 percent per year. The principal and interest on the note will be payable on the maturity date of March 31, 2018. What entry should Trapezoid Company make on: April 1, 2017; December 31, 2017; and March 31, 2018? 5b. Pragmatic Company manufactures a specialty car wax that sells for $10 per can. Pragmatic Company’s...

1. what is the difference between classification of a note as short term or long term?...

1. what is the difference between classification of a note as short term or long term? 2. at the beginning of year 1, B Co, has a note of $72,000 that calls for an annual payment of $16,246, which includes both principal and interest rate is 8 percent, what is the amount o finterewst expense in year 1 and in year 2? what is the balance of the note at the end of year 2? 3. What is the purpose...

Chase Bank account division has collected data on the age of credit accounts. The data collected...

Chase Bank account division has collected data on the age of credit accounts. The data collected indicate that the age of the accounts follows a normal distribution with mean 18 years and standard deviation 6 years. a. What proportion of the accounts are between 20 and 32 years old? b. What is the number of years in which 75% of all accounts are above?

You are given selected information about a bank. Write a short memo or report that: 1)...

You are given selected information about a bank. Write a short memo or report that: 1) Creates a balance sheet and an income statement for the bank that puts the items in their proper order and category. 2) Find the ROAA and ROAE for the bank Information: Bank Premises & Fixed Assets $50m Interest Income from Leases $5m Investments $30m Interest Payment on Deposits $30m Interest-Bearing Deposits $700m Equity Capital $120m Cost of Premises and Equipment $12 Non-Interest-Bearing Deposits $100m...

what short term and long term issues pose an immediate threat when establishing credit?

Describe the four long-term and two short-term determinants of exchange rates. Note that you need to...

Describe the four long-term and two short-term determinants of exchange rates. Note that you need to do more than simply list the determinants. You need to explain how and why they impact on exchange rates and give examples.

If a short-term note payable is included in the accounts payable balance on the financial statements,...

If a short-term note payable is included in the accounts payable balance on the financial statements, there is a violation of which of the following balance-related management assertions and the corresponding auditor objectives: A. Completeness assertion and Completeness objective. B. Valuation and Allocation assertion and Cutoff objective. C. Valuation and Allocation assertion and Accuracy objective. D. Valuation and Allocation assertion and Classification objective.

Subjects