Question

In: Accounting

1) Destin Corporation has $250,000 of debt maturing next year on September 30, 2017. The company...

1)

Destin Corporation has $250,000 of debt maturing next year on September 30, 2017. The company borrows $50,000 from Wells Fargo by issuing a 4 year, 5% note on January 1, 2017. The company has the intent and ability to use this money to retire some of the debt when it matures. If the December 31, 2016 financial statements are to be issued March 1, 2017, how would the above debt be classified on the December 31, 2016 balance sheet? Include amounts.

2) On September 30, 2017, one of Mr. Rogers tenants moved out and left the apartment a complete mess. Due to the cleaning costs incurred, the former tenant forfeited its refundable deposit of $400. Record Mr. Rogerss journal entry for the tenant's forfeiture. Do not forget journal entry descriptions.

3)  

Best Goods Grocery sold $275,000 in groceries on June 15, 2017, and collected 6% sales tax from its customers. Prepare the journal entry for the above sale. Do not forget journal entry descriptions. Show your calculation!

Solutions

Expert Solution

1. Debts : -

i. Long term debts = $250,000.

2. Journal entry for forfeiture of security

Security deposit a/c dr $400

Security forfeiture a/c cr $400

( To record forfeiture of security deposit)

3. Cash / Account receivable a/c dr $291,500

Sales revenue a/c cr $275,000

Sales tax payable a/c cr $16,500

(to record the sales revenue and sales tax payable)

Calculations : - $275,000 × 6% = $16,500

$275,000 +$16,500 = $291,500

ekkarill92 answered 2 years ago
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