On October 1, 2020, Monty Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc....

On October 1, 2020, Monty Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In lieu of a cash payment Valco Brothers Farm gave Arden a 2-year, $193,200, 10% note (a realistic rate of interest for a note of this type). The note required interest to be paid annually on October 1. Monty’s financial statements are prepared on a calendar-year basis.

Assuming Valco Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for Monty Equipment Company for the entire term of the note. Assume that reversing entries are not made on January 1, 2021 and January 1, 2022. (

Solutions

Expert Solution

Answer
Date	Account and Explanation	Debit	Credit
Oct 1,2020	Notes receivable	$ 193,200
	Sales revenue		$ 193,200
	(To record Sales)

Dec 31,2020	Interest receivable (19320010%3/12)	$ 4830
	Interest revenue		$ 4830
	(To record interest)

Oct 1,2021	Cash (193200*10%)	$ 19320
	Interest receivable		$ 4830
	Interest revenue		$ 14490
	(To record interest received)

Dec 31,2021	Interest receivable	$ 4830
	Interest revenue		$ 4830
	(To record interest)

Oct 1,2022	Cash	$ 212520
	Interest receivable		$ 4830
	Interest revenue		$ 14490
	Notes receivable		$ 193,200
	(To record amount received)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

On October 1, 2020, Pearl Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc....

On October 1, 2020, Pearl Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In lieu of a cash payment Valco Brothers Farm gave Arden a 2-year, $171,200, 10% note (a realistic rate of interest for a note of this type). The note required interest to be paid annually on October 1. Pearl’s financial statements are prepared on a calendar-year basis. Assuming Valco Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for...

On October 1, 2020, Sage Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc....

On October 1, 2020, Sage Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In lieu of a cash payment Valco Brothers Farm gave Arden a 2-year, $135,200, 8% note (a realistic rate of interest for a note of this type). The note required interest to be paid annually on October 1. Sage’s financial statements are prepared on a calendar-year basis. Assuming Valco Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for...

On November 1, 2021, Bonita Farm Equipment sold a harvesting machine to Stead Industries. Instead of...

On November 1, 2021, Bonita Farm Equipment sold a harvesting machine to Stead Industries. Instead of a cash payment, Stead Industries gave Bonita Farm Equipment a $99,000, two-year, 6.0% note. The note required interest to be paid quarterly starting February 1, 2022. Bonita Farm Equipment’s financial statements are prepared on a calendar-year basis. The following instructions refer only to this note receivable. Prepare journal entries for Bonita Farm Equipment for the full term of the note. Include the sale of...

On November 1, 2021, Headlands Farm Equipment sold a harvesting machine to Stead Industries. Instead of...

On November 1, 2021, Headlands Farm Equipment sold a harvesting machine to Stead Industries. Instead of a cash payment, Stead Industries gave Headlands Farm Equipment a $106,000, two-year, 6.0% note. The note required interest to be paid quarterly starting February 1, 2022. Headlands Farm Equipment’s financial statements are prepared on a calendar-year basis. The following instructions refer only to this note receivable. Prepare journal entries for Headlands Farm Equipment for the full term of the note. Include the sale of...

on november 1,2021, buffalo farm equipment sold a harvesting machine to stead industries. Instead of a...

on november 1,2021, buffalo farm equipment sold a harvesting machine to stead industries. Instead of a cash payment, stead industries gave buffalo farm equipment a 89000 two-year,6.0% note. the note required interest to be paid quarterly starting february 1,2022. Buffalo farm equipment's financial statements are prepared on a calendar-year basis. Prepare journal entries for buffalo farm equipment for the full term of the note . Include the sale of the equipment on Nov1,2021, receipt of interest, adjusting entries required on...

On October 1, 2017, Flint Corporation sold a harvesting machine to Pearl Industries. Instead of a...

On October 1, 2017, Flint Corporation sold a harvesting machine to Pearl Industries. Instead of a cash payment, Pearl Industries gave Flint a $139,000, two-year, 12% note; 12% is a realistic rate for a note of this type. The note required interest to be paid annually on October 1, beginning October 1, 2018. Flint’s financial statements are prepared on a calendar-year basis. Required: a) Assuming that no reversing entries are used and that Pearl Industries fulfills all the terms of...

On October 7, Monty Company sold merchandise to a customer for $1,200 with credit terms of...

On October 7, Monty Company sold merchandise to a customer for $1,200 with credit terms of 2/10, n/30. The cost of the merchandise is $800. On October 10, Monty granted the customer a $100 allowance on the merchandise the customer purchased on October 7. In the October 10 journal entry, Monty will: Debit Merchandise Inventory $100; credit Cost of Goods Sold $100 Debit Merchandise Inventory $100; credit Sales Returns and Allowances $100 Debit Sales Returns and Allowance $100; credit Accounts...

Bramble Company purchased equipment for $220,800 on October 1, 2020. It is estimated that the equipment...

Bramble Company purchased equipment for $220,800 on October 1, 2020. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $12,000. Estimated production is 36,000 units and estimated working hours are 20,000. During 2020, Bramble uses the equipment for 500 hours and the equipment produces 1,100 units. Compute depreciation expense under each of the following methods. Bramble is on a calendar-year basis ending December 31. (Round rate per hour and rate...

Blue Company purchased equipment for $266,000 on October 1, 2020. It is estimated that the equipment...

Blue Company purchased equipment for $266,000 on October 1, 2020. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $14,000. Estimated production is 40,000 units and estimated working hours are 20,000. During 2020, Blue uses the equipment for 530 hours and the equipment produces 1,100 units. Compute depreciation expense under each of the following methods. Blue is on a calendar-year basis ending December 31. (a) Straight-line method for 2020 $enter...

Oriole Company purchased equipment for $238,400 on October 1, 2020. It is estimated that the equipment...

Oriole Company purchased equipment for $238,400 on October 1, 2020. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $15,200. Estimated production is 36,000 units and estimated working hours are 20,000. During 2020, Oriole uses the equipment for 500 hours and the equipment produces 1,100 units. Compute depreciation expense under each of the following methods. Oriole is on a calendar-year basis ending December 31. (Round rate per hour and rate...

Subjects