Question

18.Record the following transactions for Casiano Communications Inc. in the general journal.
May 30 Accepted a 60-day, 9% note for $15,000 from Photo Master as payment on an account receivable. J
uly 29 Received interest due on Photo Master note. The note is renewed for 45 days at 15% interest.
Aug. 28 Received full payment of the Photo Master note.

19. Prepare the general journal entries for the following notes payable transactions for the Bear Mountain Café.

       Jan. 3   Bear Mountain Café purchased merchandise on account, $4,000.

      Mar. 2    Bear Mountain Café issued a 90-day, 12% note to pay off the account.

     May 15     Bear Mountain Café paid off the preceding note on the maturity date.

24. Use the following data:

      Asset cost                                                                   $25,000

     Expected life                                                               3 years

    Estimated salvage value                                              $2,000

       Using the sum-of-the-year's-digits method, the amount of depreciation for the first year would be

Answer 1

Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Notes receivable			15000
	Accounts receivable			15000
	(for note received on account)
b.	Cash account			225
	Interest revenue (15000*9%*60/360)		225
	(for interest received)
c.	Cash account			15168.75
	Notes receivable				15000
	Interest revenue	(15000*9%*45/360)		168.75
	(for notes received)
Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Merchandise inventory		4000
	Accounts payable				4000
	(for purchase made on account)
b.	Accounts payable			4000
	Notes payable				4000
	(for payment made through issuance of notes)
c.	Notes payable			4000
	Interest expense (4000*12%*90/360)	120
	Cash account				4120
	(for payment made)
Cost of assets		25000
Less: Salvage value		2000
Depreciable cost		23000
Sum of Year's digit = 3+2+1 = 6
Depreciation in First year = 23000*3/6 = 10500