Interest has accrued at 7% on the long-term notes payable since July 1, 2018. The next...

Interest has accrued at 7% on the long-term notes payable since July 1, 2018. The next six month interest payment at 6.9% on the bond is due on March 1, 2019. The original discount on bonds payable is $15,800. No portion of the discount has been amortized for any part of 2018; the bonds are 10-yr maturity (Use Straight-line). Notes Payable (LT) 1/1 Bal $43,000 7/1 Increased Mortgage CR $70,000 7/1 Bal $ $113,000 Discount on Bonds Payable 1/1 Bal $6400 What is the adjusting journal entry for this problem?

Expert Solution

Adjusting Entry:

Working Notes:

Interest on $70,000 at 7% for 6 months = $2,450 ($70,000*7/100*6/12 months)

Interest on $43,000 at 6.9% for 4 months = $989 ($43,000*6.9/100*4/12 months)

Total interest = $3,439 ($2,450 + $989)

ekkarill92 answered 2 years ago

Prepare year end adjusting entries for these situations. 1. Accrued interest on notes payable is $80....

Prepare year end adjusting entries for these situations. 1. Accrued interest on notes payable is $80. 2. Income taxes incurred but not paid or recordered total to $1,000. 3. Legal fees of $5000 were received in advanced. By the end of the year, 80% of the fees were earned. 4. Services totaling $1,000 have been completed but not recorded or billed. 5. Payroll for the work week (five days) to be paid on Friday is $10,000. The year ends on...

1) If a notes payable is reclassified from a long-term liability to a short-term liability, then...

1) If a notes payable is reclassified from a long-term liability to a short-term liability, then A The amount of total liabilities stays the same B The total liabilities increase C Current liabilities decrease D Long-term liabilities decrease 2) On October 1, 2025, Conway, Inc. borrowed $300,000 by signing a nine-month, 6% note payable. Interest was accrued on December 31, 2025. What is the journal entry on July 1, 2026, the date the note was paid? 3) Jackson Company pays...

1-On July 1, 2013, Avery Services issued a long-term note payable for $10,000. It is payable...

1-On July 1, 2013, Avery Services issued a long-term note payable for $10,000. It is payable over a 5-year term in $2,000 installments on July 1 of each succeeding year. Journalize required transactions on July, 1 2013. Journalize required transactions on Dec 31 2013 Journalize required transactions on July 1 2014. Show calculations 2-A $20,000, 3-month, 8% note payable was issued on November 1, 2015. The amount of interest expense recorded in the year 2016 is $

Mann, Inc., which owes Doran Co. $1,000,000 in notes payable with accrued interest of $90,000, is...

Mann, Inc., which owes Doran Co. $1,000,000 in notes payable with accrued interest of $90,000, is in financial difficulty. To settle the debt, Doran agrees to accept from Mann equipment with a fair value of $950,000, an original cost of $1,400,000, and accumulated depreciation of $325,000. Instructions (a) Compute the gain or loss to Mann on the settlement of the debt. (b) Compute the gain or loss to Mann on the transfer of the equipment. (c) Prepare the journal entry...

Question 1 For many companies, current liabilities include accounts payable interest payable short-term notes payable all...

Question 1 For many companies, current liabilities include accounts payable interest payable short-term notes payable all of the above Question 2 A company issues a $15,000, 5.5% note due in 90-days. How much interest will be due at maturity? (Use a 360-day year. Round answers to two decimal places.) $825.00 $206.25 none of the above Question 4 See the previous question. On August 30, the due date of the account payable, what entry would our company make if they paid...

7. Comfort realty has the following account balances at December 31, 2018 Notes payable ($80,000 due...

7. Comfort realty has the following account balances at December 31, 2018 Notes payable ($80,000 due after 12/31/19) $200,000 Unearned revenue 75,000 Other long-term debt ($30,000 due in 2019) 150,000 Salaries payable 22,000 Other accrued expense 15,000 Accounts payable 100,000 In addition, Comfort realty is involved in a lawsuit. Legal counsel feels it is probably Comfort realty will pay damages of $38,000 in 2019. a. Prepare the current liability section of comfort realty’s December 31, 2018, balance sheet b. Comfort...

Notes receivable and notes payable a) On December 1, 2018, Hawkins, Inc. loaned money to a...

Notes receivable and notes payable a) On December 1, 2018, Hawkins, Inc. loaned money to a customer who signed a note having a face value of $16,200. The note is due on May 1, 2019 and does not specific an interest rate. Hawkins credited cash for $15,500 on December 1 as a result of the loan. Required: Prepare the entry on the books of Hawkins, Inc. to record the note-related activity on: December 1, 2018 December 31, 2018...

Bonita Company commonly issues long-term notes payable to its various lenders. Bonita has had a pretty...

Bonita Company commonly issues long-term notes payable to its various lenders. Bonita has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8% on an annual basis). Bonita has elected to use the fair value option for the long-term notes issued to Barclay’s Bank and has the following data related to the carrying and fair value for these notes. Any changes in fair value are due to changes in market rates, not...

In order to expand its business, the management of Carroll, Inc. issued a long-term notes payable...

In order to expand its business, the management of Carroll, Inc. issued a long-term notes payable for $50,000 on January 1, 2016. The note will be paid over a 10-year period with equal annual principal payments, December 31 of each year. The annual interest rate is 12%. Prepare the journal entry for the first installment payment.

Dean Corp. issued $500,000 of 7% debentures on January 1, 2018, with interest payable semiannually on...

Dean Corp. issued $500,000 of 7% debentures on January 1, 2018, with interest payable semiannually on June 30 and December 31 to yield 6%. The bonds mature in 5 years. Prepare an amortization table for the bonds. Make sure you provide column headers. Excel would be the best way to prepare this. Write out in pencil your labelled calculations for the first two interest payments. Write the entries for the first two payments. Why would the issuer not want to...

Question